Goldman Sachs boosts US GDP forecast to 6.8% in 2021 and now expects $1.5 trillion in COVID-19 stimulus

Biden speech — Patrick Semansky/Pool via AP

Goldman Sachs raised its US GDP forecast to 6.8% for 2021, from 6.6% previously.
Economists now expect a coronavirus relief package worth $1.5 trillion, up from $1.1 trillion.
The bank brought forward its forecast for the Federal Reserve's first rate hike to the first half of 2024.
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Goldman Sachs upgraded its outlook for the US economy in 2021 on Tuesday and said it now expects a larger coronavirus relief package.

Economists at the bank raised their US GDP forecast to 6.8% in 2021 a previous estimate of 6.6%, and to 4.5% in 2022, from 4.3%.

Last week, the Senate passed a budget resolution that paves the way for approval of President Joe Biden's proposed relief plan. The next step, expected to be completed by the end of this week, requires committees to draft and vote on legislation such as the details, size, and timing, of particular provisions.

Goldman Sachs doesn't expect the key decision on the size of the bill to take place for another few weeks. But economists raised their COVID-19 relief package estimate to $1.5 trillion, up from its previous estimate of $1.1 trillion.

The bank brought forward its forecast for the Federal Reserve's first rate hike to the first half of 2024, from the second half of that year, on the basis of its upgraded GDP forecast, a larger-than-expected decline in the unemployment rate in January, and signs of a firmer inflation outlook.

"We expect the FOMC to start tapering its asset purchases in early 2022," economists Alec Phillips, David Mericle, and Blake Taylor wrote.

Read the original article on Business Insider