Most economists predict that the Federal Reserve will raise interest rates by 1 yard each in the two policy meetings of Q1 in 2023, and then end the tightening cycle.

(Bloomberg)

[Financial Channel/Comprehensive Report] According to foreign media surveys, most economists predict that the Federal Reserve will raise interest rates by 1 yard in the two policy meetings of Q1 in 2023, and then end the tightening cycle. The interest rate remains unchanged for the remainder of the period.

More than 80 percent of respondents (68 out of 83) in the latest poll believe the Fed will raise interest rates at its January 31-February 1 policy meeting, Reuters reported. 1 yard, which would bring the rate to a range of 4.50% to 4.75%.

The other 15 people are expected to raise interest rates by 2 yards.

Please read on...

In addition, 61 of 90 economists believe that the federal funds rate will reach a high of 4.75% to 5% in March. The 2023 median is one yard lower.

Responding to a separate question, more than 60 percent of respondents (55 out of 89) said leaving the benchmark would be more likely to keep rates on hold for at least the rest of the year than cut them in response.

That view is in line with the survey's median forecast for the first rate cut in early 2024.

But there were also 34 respondents who saw a rate cut more likely this year, with 16 citing plunging inflation as the biggest reason, 12 pointing to a worse recession and four citing a sharp rise in unemployment .

James Knightley, chief international economist at ING, pointed out that U.S. inflation data indicated that price pressures were easing, but the Fed would be cautious about peaking interest rates amid a strong job market environment.

Philip Marey, senior U.S. strategist at Rabobank, said the Fed puts inflation above employment, and only a sharp drop in core inflation will convince the Federal Open Market Committee (FOMC) to cut interest rates this year.

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