GS & ING: Still See Two Hikes In 2022

Following Biden's pick for Powell as Chair and Brainard as Vice Chair, both Goldman Sachs and ING expect broad policy continuity and still see two rate hikes in 2H2022 (at least two for ING).

• GS note that "Powell and Brainard both have similar views on mon pol and have also emphasized that they consider a broad set of indicators to gauge progress on the Fed's broad and inclusive employment goal, although Powell indicated in November that maximum employment might look different from pre-pandemic conditions".
• The "continuity in Fed leadership likely signals continuity in the current monetary policy stance, and we continue to expect liftoff shortly after tapering ends, with the first hike in July 2022, the second in November, and a pace of two hikes per year thereafter".

• ING add that "there will be a more influential Brainard influence to be taken into account, but while we can't ignore this, the overall policy thrust leaves us as we were."
• "The Fed will still taper, and likely hike in 2022 (we think at least twice in 2H), and the rates market will remains in a state of anticipation for tighter policy and a higher rates environment generally."