Survey Shows Economists Predict Two Fed Rate Cuts This Year

Odaily Planet Daily report: According to a Bloomberg survey, economists have pushed back their expectation for the Fed’s next rate cut from March to June, but still anticipate two 25-basis-point cuts before the end of this year. Of the 46 economists surveyed, the projected pace of rate cuts is faster than the current pricing in futures markets and includes one additional cut compared to the median forecast by Fed officials in December last year. Nearly one-third of the surveyed economists expressed concern about Kevin Warsh, the nominee for Fed chair proposed by Trump. When asked whether they believed Warsh would be committed to achieving the Fed’s 2% inflation target, 13% responded that they were unsure, and 18% answered “no.” In the December survey, economists had expected rate cuts in March and September; in the survey conducted between March 6 and 11 (after the outbreak of conflict in the Middle East), respondents now expect cuts in June and October. The median forecast in the survey indicates that economists expect interest rates to be in the range of 3% to 3.25% by the end of this year.