Accelerating inflation could cause the Federal Reserve to get even more aggressive than economists expect in the way it raises interest rates this year, according to a Goldman Sachs analysis.

With the market already expecting four quarter-percentage-point hikes this year, Goldman economist David Mericle said the omicron spread is aggravating price increases and could push the Fed into a faster pace of rate increases.

“Our baseline forecast calls for four hikes in March, June, September, and December,” Mericle said in a Saturday note to clients. “But we see a risk that the [Federal Open Market Committee] will want to take some tightening action at every meeting until the inflation picture changes.”

The report comes just a few days ahead of the policymaking group’s two-day meeting starting on Tuesday.

Markets expect no action regarding interest rates following the gathering but do figure the committee will tee up a hike coming in March. If that happens, it will be the first increase in the central bank’s benchmark rate since December 2018.

Raising interest rates would be a way to head off spiking inflation, which is running at its highest 12-month pace in nearly 40 years.

Mericle said that economic complications from the Covid spread have aggravated imbalances between booming demand and constrained supplies. Secondly, wage growth is continuing to run at high levels, particularly at lower-paying jobs, even though enhanced unemployment benefits have expired and the labor market should have loosened up.

“We see a risk that the FOMC will want to take some tightening action at every meeting until that picture changes,” Mericle wrote. “This raises the possibility of a hike or an earlier balance sheet announcement in May, and of more than four hikes this year.”

Traders are pricing in nearly a 95% chance of a rate increase at the March meeting, and a more than 85% chance of four moves in all of 2022, according to CME data.

However, the market also is now starting to tilt to a fifth hike this year, which would be the most aggressive Fed that investors have seen going back to the turn of the century and the efforts to tamp down the dot-com bubble. Chances of a fifth rate increase have moved to nearly 60%, according to the CME’s FedWatch gauge.

In addition to hiking rates, the Fed also is winding down its monthly bond-buying program, with March as the current date to end an effort that has more than doubled the central bank balance sheet to just shy of $9 trillion. While some market participants have speculated that the Fed could shut down the program at next week’s meeting, Goldman does not expect that to happen.

The Fed could, though, provide more indication about when it will start unwinding its bond holdings.

Goldman forecasts that process will begin in July and be done in $100 billion monthly increments. The process is expected to run for 2 or 2½ years and shrink the balance sheet to a still-elevated $6.1 trillion to $6.6 trillion. The Fed likely will allow some proceeds from maturing bonds to roll off each month rather than selling the securities outright, Mericle said.

However, the unexpectedly strong and durable inflation run has posed upside risks to forecasts.

“We also increasingly see a good chance that the FOMC will want to deliver some tightening action at its May meeting, when the inflation dashboard is likely to remain quite hot,” Mericle wrote. “If so, that could ultimately lead to more than four rate hikes this year.”

There are a few key economic data points out this week, though they will come after the Fed meets.

Fourth-quarter GDP is out Thursday, with economists expecting growth around 5.8%, while the personal consumption expenditures price index, which is the Fed’s preferred inflation gauge, is due out Friday and forecast to show a monthly gain of 0.5% and a year-over-year increase of 4.8%.