2017.11.1921:43:00UTC+00Goldman Sachs Projects Four Fed Rate Hikes in 2018

In a research note by Goldman Sachs Group Inc., economists said the U.S. economy is transitioning into 2018 with solid momentum that is seen to bolster wages and inflation in a wider scale, prompting the Federal Reserve to hike interest rates four times in the following year.

Goldman Sachs chief economist Jan Hatzius upgraded his growth outlook for 2018 to 2.5 percent and cut its projection for unemployment to 3.7 percent by the end of 2018.

Ahead of the latest adjustment the latest Goldman Sachs estimate for 2018 growth was 2.4 percent.

The investment banking and securities firm also said U.S. unemployment rate, which stood at 4.1 percent in October, may hit 3.5 percent in late 2019.

In the report's summary, economists said the projections would indicate a transformation over the current cycle from the lowest labor market in postwar U.S. history to one of the tightest level. It is anticipated that a tighter labor market and a more normal inflation picture will result in the Fed delivering four rate hikes in the following year.

The estimate is one more rate hike more than the average prediction of Fed officials and more than what the financial markets are presently pricing in.