"The U.S. economy is still displaying solid underlying fundamentals, but it is facing rising headwinds from a negative fiscal impulse and significant policy tightening by the Federal Reserve to combat high inflation," said Lydia Boussour, Lead U.S. The sharp increase in GDP in the fourth quarter was partly due to a massive surge in business inventories, which added 4.9 percentage points, the second largest contribution since 1987. "With recent inflation readings greatly exceeding expectations, we believed the Fed should kick off its tightening cycle with a 50 basis point rate hike in March," said Boussour.