Goldman Sachs Group Inc, has issued a new report predicting the US Federal Reserve may hike interest rates up to as high as 5% by March of 2023, raising its earlier predictions by 25 basis points.

Last week, David Solomon, Goldman Sachs Chief Executive Officer, said he felt the Federal Reserve would hike rates above 4.5%-4.75% if it does not feel there are, “real changes in behavior.”

The economists with Goldman also predicted that if rates are going to 5%, they would likely entail a 75 basis point hike at the next November 1-2 meeting, a 50 basis point hike in December, and then 25 basis point hikes in February and March.

Goldman’s economists said there were three reasons they were predicting the Fed would continue to hike rates after February, citing “uncomfortably high” inflation, a need to slow down the economy as they reach a point where they cannot tighten policy any more, and avoiding any early easing of financial conditions before inflation has been brought under control.

Analysts note that the prevailing belief is the Federal Reserve wants to err on the side of too much hawkishness, with an understanding it will be easier to ease policy in the face of overtightening, that it would be to tackle inflation which entrenches due to insufficient tightening. SO far this year investors have repeatedly seen rallies off hopes of laxening Fed policy turn to downturns as the Fed has shown its commitment to tackling inflation above all else.