The Federal Reserve is likely to keep interest rates elevated through 2023, dashing Wall Street’s hopes for rate cuts in the second half of 2023 and almost guaranteeing a recession.
That’s according to a group of economists surveyed by Bloomberg, who projected the U.S. central bank will raise the benchmark federal funds rate to a peak of 4.9% in 2023 and hold it there until 2024.
The forecast comes days before the Fed’s final meeting of the year, during which policymakers are widely expected to raise rates by 50 basis points following four consecutive 75 basis-point hikes. Officials will announce their decision on Wednesday at 2 p.m. at the conclusion of their two-day meeting.
The Fed will also release its first quarterly forecasts since September, providing insight into where it sees the U.S. economy headed over the next few years. Should policymakers signal that they expect rates to remain high through 2024, it could deliver a hawkish shock to the markets, which are currently betting that rates will be cut in the second half of the year.
Source: https://www.foxbusiness.com
