![]() Disagreement between Fed officials on rates could occur. This may mean that there is no consensus decision on interest rates in the final meetings of 2023, with a one rate hike a possibility depending on the view of some officials. Fed Governor Michelle Bowman said on August 5: “I also expect that additional rate increases will likely be needed to get inflation on a path down to the FOMC's 2 percent target.” Therefore, certain Fed officials still see more rate hikes as necessary. macro strategist at TD Securities, who forecasts one more rate hike next week.Not everyone shares that view. the longer you postpone that decision, the harder it is going to be to bring inflation lower," said Oscar Munoz, chief U.S. "The longer they don't hike, the longer the economy is going to continue expanding above trend. Inflation as measured by core PCE was forecast to remain above 2% at least until 2025. recessions - also looks at other factors to officially declare a recession, including employment and real income. The National Bureau of Economic Research - the official arbiter of U.S. "If most Fed officials feel at least another 25-basis-point hike will be necessary, it seems simplest to deliver that hike in June rather than 'skip'."įewer than 60% of respondents to an extra question, 28 of 48, said the world's largest economy would fall into a recession this year, compared to more than 70% in a poll just a few weeks ago.Īlthough the median forecast from the poll has the economy contracting 0.4% and 0.5% in the last two quarters of this year, respectively, that alone would not necessarily mean recession. economist at Citi, who expects a 25-basis-point increase at both the June and July meetings. But communicating why rates should not rise in June, despite data to the contrary will be challenging," said Andrew Hollenhorst, chief U.S. "There is not a substantial economic difference between raising policy rates in June or doing so in July. Labor Department is due to release consumer price inflation data on June 13, the first day of the Fed meeting. Markets are pricing around a 60% chance of a rate cut this year. Just over 25% of economists in the poll, 23 of 86, forecast at least one Fed rate cut by the end of 2023, but that is down from 28% in the last poll. The Canadian central bank had been on hold since January. If the Fed decides to go for a June hike, it would follow in the footsteps of the Bank of Canada, which surprised markets on Wednesday by hiking its key overnight benchmark rate by 25 basis points to 4.75%. Only one predicted a hike in both June and July. More than one-third of respondents in the poll, 32 of 86, say the Fed will hike at least once more this year, including the eight who say that will happen in June and 24 who expect a rate rise in July after a pause. Treasury Secretary Janet Yellen said on Wednesday the economy was strong amid robust consumer spending but some areas were slowing, and that she expected continued progress in bringing inflation down over the next two years.
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