Expectations that the Federal Reserve will raise interest rates sharply by half a percentage point this year are rising as central bankers say they may soon need to step up efforts to bring down the highest level of inflation in 40 years.

Wall Street economists collectively revised their forecasts for monetary policy in 2022 this week, expecting the Federal Reserve to double the pace of rate hikes at one or more upcoming meetings.central bank post This month, the first hike since 2018, raised the federal funds rate by 0.25 percentage points to a new target range of 0.25% to 0.50%.

Economists took a cue from some of the FOMC’s most senior policymakers, who made clear this week that the central bank was willing to act aggressively given price pressures.

“The signal has clearly been very hawkish for some time, but it has reached mania levels in recent days,” said Simona Mocuta, chief economist at State Street Global Advisors.

Federal Reserve Chairman Jay Powell kicked off a busy week for officials at the bank on Monday. Embrace The Fed “rapidly” raised interest rates to a “neutral” level, preventing further demand stimulus. He also quipped that “nothing” could stop it from increasing by half a percentage point in May.

New York Fed President John Williams, a member of Powell’s inner circle, said Friday at the end of the week that the Fed should continue to do so if data proves it should.This marks his departure from his earlier position There was no convincing argument to support “a big step” at the March meeting. Several other chapter presidents, including Charles Evans of Chicago, Mary Daly of San Francisco and Rafael Bostic of Atlanta, have also offered to do the same.

Cleveland Fed President Loretta Mester joined more hawk member St. Louis’ James Bullard and Fed Governor Christopher Waller, for example, advocate for “early” rate hikes to reach neutral or higher in the near term. Her goal is to hit 2.5% by the end of 2022.

“They’re trying to disambiguate,” Tom Bocelli, chief U.S. economist at RBC Capital Markets, said of the Fed’s communications. He said a 0.5 percentage point increase at the next meeting was a “done deal” and at least a percentage point increase after that.

Morgan Stanley, Goldman Sachs and Jefferies now expect the Fed to hike rates by 0.5 percentage points in a row starting in May, and then adjust by 25 percentage points each at the remaining four meetings after the June meeting. This will be accompanied by a shrinking of the $9 trillion balance sheet, a process that could begin in May.

Citigroup released one of its most aggressive forecasts on Friday, expecting the Fed to raise rates by half a percentage point at its next four meetings. The remaining two meetings this year will then slow to a more typical 1/4 point cadence to bring the upper end of the target federal funds range to 3%. Citi expects it to rise to 3.75% by 2023.

“Once it’s down 50 basis points, it increases the odds of another 50 basis point gain,” said Andrew Hollenhorst, its chief U.S. economist. “You don’t want to be seen as less active if it doesn’t look like it’s getting better in terms of inflation.”

Changing expectations have rattled the U.S. government bond market, sending yields on bonds of all maturities soaring. The benchmark 10-year note was trading as high as 2.5%, nearly a percentage point above its January level. The two-year yield soared as high as 2.23% at one point, and was around 0.8% in early 2022.

Growing support for the Fed to “think bigger” — as Bullard dissented in March’s 25-point move and urged his colleagues this week — reflects recognition Inflationary pressures are becoming more common and deeply embedded in the economy.

“If the Fed is too slow to reach [neutral] Blerina Uruci, chief U.S. economist at T Rowe Price, said if the milestone is reached, it could put itself in a position to need to tighten policy more quickly later this year or early next year and cause a sharp slowdown in economic activity.