Central Banks


Reuters polled analysts expectations for the Federal Open Market Committee (FOMC) ahead. In summary:

  • The U.S. Federal Reserve will lift interest rates higher by the end of this year than anticipated just a month ago, keeping alive already-significant risks of a recession,

More:

  • May 12-18 Reuters poll
  • near-unanimous set of forecasts for a 50-basis-point hike in the fed funds rate, currently set at 0.75%-1.00%, at the June policy meeting
  • Fed is expected to hike by another 50 basis points in July, according to 54 of 89 economists
  • before slowing to 25- basis-point hikes for the remaining meetings this year. But 18 respondents predicted another half-percentage-point rise in September too.
  • A majority of poll respondents now expect the fed funds rate to be at 2.50%-2.75% or higher by the end of 2022, six months earlier than predicted in the previous poll, and roughly in line with market expectations for a year-end rate of 2.75%-3.00%

None of this is too surprising. Fed officials have been telegraphing 50bps in June and again in July.

Link here to the Reuters piece for a little more.



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