The latest U.S. January inflation data came in like a “punch in the stomach” for the Federal Reserve, which raises the possibility for an aggressive 50 basis points rate hike in March, the global chief economist of Citi Research said.

The consumer price index for January, which measures the costs of dozens of everyday consumer goods, rose 7.5% year-on-year, the Labor Department reported Thursday.

“This inflation data today came like a punch in the stomach for Jay Powell and his colleagues,” Nathan Sheets told CNBC’s “Squawk Box Asia” on Friday, referring to the Fed chairman.

“Their narrative is that as the year progresses, we should see inflation start to abate and to come on down. And there was not even a hint of that in the January data,” he added.

The monthly CPI rates also came in stronger than expected. Both headline and core CPI rose 0.6%, compared to estimates for a 0.4% increase by both measures.

Even with the challenges posed by the highly contagious omicron variant, inflation still remains high, and more progress needs to be made to bring inflation down to 3% for this year, Sheets said.

“I think we’re also going to have to see an increasingly aggressive Federal Reserve. And I think that clearly after today’s inflation data, 50 basis points for March has to be on the table,” he said. Even then, he added, it may not be enough.

“What are we going to have to do through the rest of the year to wrestle inflation to the ground? Because it doesn’t seem like it’s abating on its own — at least there’s no sign of that yet,” said Sheets.

Following the latest inflation data, Goldman Sachs said it was raising its Fed forecast to include “seven consecutive 25bp rate hikes” at each of the remaining Federal Open Market Committee meeting in 2022. The investment bank had previously predicted five hikes for the year.

“We see the arguments for a 50bp rate hike in March. The level of the funds rate looks inappropriate, and the combination of very high inflation, hot wage growth and high short-term inflation expectations means that concerns about falling into a wage-price spiral deserve to be taken seriously,” its analysts said it a note on Thursday.

“We could imagine the FOMC concluding that even a meaningful risk of an outcome as serious as a wage-price spiral requires a more aggressive and immediate response,” they added.

Even before the inflation numbers were out, Bank of America predicted the Fed will launch an aggressive rate hike campaign starting this year. It’s economists are expecting seven quarter-percentage-point rate hikes in 2022, followed by four more next year.

The inflation numbers come at a crossroads for the U.S. economy, with 2021′s rapid growth pace expected to slow this year as fiscal and monetary stimulus fade.

The momentum for the U.S. economy remains soft and is dependent upon how the omicron factor plays out, Sheets said.

“If the Fed is going to get an assist on inflation, it’s got to come from improvements in the pandemic, some rebalancing away from the red hot goods sector into services, and we need to see some attenuation of the still intense pressures in supply chains,” he added.