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

• Goldman Sachs raised its forecast for 2021 US gross-domestic-product growth to 6.8% from 6.6%.
• Economists now expect a coronavirus relief package worth $1.5 trillion, up from $1.1 trillion.
• The bank moved up its forecast for the Fed's first interest-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 says it now expects a larger coronavirus relief package.

Economists at the bank raised their forecast for 2021 US gross-domestic-product growth to 6.8% from 6.6% and to 4.5% from 4.3% in 2022.

Last week, the Senate passed a budget resolution that paves the way for approval of President Joe Biden's proposed $1.9 trillion relief plan. The next step, expected to be completed this week, requires committees to draft and vote on legislation such as the details, size, and timing of particular provisions. Read more: A wealth-management research chief shares 6 stock-market sectors to buy as the country reopens and the economy experiences its 'best single year of GDP growth since 2000'

Goldman Sachs doesn't expect the size of the bill to be finalized 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 interest-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.

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

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