S&P expects Fed to raise interest rates 6 times this year

By Ovunc Kutlu

ANKARA (AA) - S&P Global Ratings expects the US Federal Reserve to raise interest rates six times this year starting in March, according to a report released Thursday.

The global rating agency forecasts another five rate hikes in total during 2023 and 2024 and anticipates the central bank to begin shrinking its balance sheet early in 2023.

The agency said it also expects that the American economy will continue to grow even as the Fed tightens its monetary policy.

"We also assume that higher rates will not destabilize the economy due to heightened market volatility," the report said.

It estimates the US economy to grow 3.9% this year, despite the Fed rate hikes, adding it sees only a 10%-15% chance of a recession.

Markets and investors are expecting the central bank to make faster and higher rate hikes this year in order to tame record-high inflation.

Consumer prices in the US rose 7.5% year-on-year in January, marking the largest 12-month increase since February 1982, the Department of Labor said earlier.