![]() ![]() "We maintain the first rate cut in March 2024. "On the data front, despite the slowdown in inflation in March, there is still a lot more work to be done to get back to the 2% target," said Michael Gapen, chief U.S. Only 26 respondents with an end-2023 view forecast a cut, similar to market expectations. central bank would hike its key policy rate by 25 basis points to the 5.00%-5.25% range at a May 2-3 meeting, in line with market pricing.īeyond that, 59 of 100 economists expected the Fed to keep its policy rate unchanged through at least this year. ![]() ![]() Nearly 90% - 94 of 105 - of the economists who participated in the latest Reuters poll, predicted the U.S. two-year Treasury yields, which typically reflect near-term interest rate expectations, have soared nearly 75 basis points in the past month as still-strong data have reduced the prospect of rate cuts. Worries about an economic downturn, which were also highlighted by the Fed at its March 21-22 policy meeting, and concerns about banking sector stress have encouraged markets to price in at least a 25-basis-point cut by the end of 2023.īut a rate cut looks less likely than higher rates in the face of inflation that is running well over twice the Fed's 2% target, ongoing strength in the labor market and a significant easing in banking sector stress over the past few weeks. Federal Reserve will deliver a final 25-basis-point interest rate increase in May and then hold rates steady for the rest of 2023, according to economists in a Reuters poll, which also showed a short and shallow recession this year was likely. ![]()
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