Citigroup sees a ‘less hard’ landing for global economy

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Citigroup economists  have slightly raised their global growth forecast and see the Federal Reserve hiking interest rates three times in 2023.

Citigroup sees a "less hard" landing but still expect the world's economy to grow at the slowest pace in 40 years.

The Wall Street brokerage now sees global growth slowing this year to about 2.2%, 0.25% higher than their previous estimate.

The reason is improving macroeconomic trends, according to a note by economists led by Nathan Sheets.

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A shopping cart is seen in a supermarket in Manhattan, New York City. (REUTERS/Andrew Kelly/File Photo / Reuters Photos)

Citigroup outlined its cautious pessimism based on three points: China's stronger and clearer economic outlook, stagnation in the euro area as opposed to a contraction estimated earlier and resilience in the United States.

Producer prices accelerated in January by the biggest margin in seven months, and another report showed the number of Americans filing new claims for unemployment benefits unexpectedly fell.

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Nathan Sheets, chief economist at Citigroup. (Photographer: Alicia Vera/Bloomberg via Getty Images / Getty Images)

Citigroup said it expected the U.S. Federal Reserve to hike rates three times this year, taking the Fed funds rate beyond 5%.

That follows views presented last week by Bank of America and Golden Sachs.

The U.S. Fed will release the minutes of its latest meeting on Wednesday, which will give traders a glimpse of how high officials are projecting interest rates will go after recent data

The Citigroup Inc (Citi) logo. (REUTERS/Chris Helgren / Reuters Photos)

STICKY INFLATION OPENS DOOR TO STEEPER FED RATE HIKE IN MARCH

Before the latest data was released, a majority of the economists expected the Fed to raise rates at least twice more in coming months, according to a Reuters poll.

Reuters contributed to this report.