The US Federal Reserve will likely double the pace of tapering its bond purchases from January to $30 billion and ending its pandemic-era bond buying scheme by mid-March, Goldman Sachs strategists said in a daily note on Thursday.
The increased openness to accelerating taper pace likely reflects both higher-than-expected inflation over the last two months and greater comfort among Fed officials that a faster pace would not shock financial markets, analysts led by Jan Hatzius said in a client note.
Goldman expects the Fed to raise interest rates only from June for a total of three times in 2022, despite the accelerated tapering calendar. The U.S. investment bank has raised their interest rate hike expectations for 2022 to three from two.
Minutes of the Nov. 2 -- 3 policy meeting of the central bank showed that various policymakers said they would be open to speeding up the taper of their bond-buying programme if inflation held and would move faster to raise rates.