U.S. Markets

Credit Suisse sees four U.S. rate hikes in 2018 after budget deal

A logo of Credit Suisse is pictured on a building in Geneva, Switzerland, November 8, 2017. REUTERS/Denis Balibouse

NEW YORK (Reuters) - Credit Suisse’s U.S. economists said on Monday they now expect the Federal Reserve to raise key U.S. short-term borrowing costs four times in 2018, one more than their earlier view for three rate hikes, following last week’s U.S. budget agreement.

“The FOMC has already boosted their growth outlook for 2018 in light of the tax bill passed in December and we anticipate

another upward revision to their growth forecast at the March meeting,” the Credit Suisse economists wrote in a research note.

“With the economy near (or above) full employment, prudent

risk management suggests the Fed ought to accelerate their tightening in response to a large positive demand shock,” they said.

Reporting by Richard LeongEditing by Chizu Nomiyama