Leading Economists Reveal Their Fed Interest Rate Forecasts

A Bloomberg survey shows economists that the Fed will cut interest rates twice this year, citing an estimate from analysts who believe it is likely to be in effect at once. Those who were polled also expressed some concerns about Kevin Warsh, Donald Trump’s nominee for Fed chairman.

According to a survey of 46 economists, “the Fed’s next interest rate cut has been expected from March to June.” Although most participants still predict two rate cuts of 25 basis points each before the end of the year, despite this, they are more likely to be from one side.

The survey results show that economists think the pace of interest rate cuts will be faster than what futures markets are pricing in, according to the survey findings. Moreover, that expectancy means one more rate cuts than the average estimate given by Fed officials last December.

Meanwhile, about a third of the economists polled expressed concern over Kevin Warsh, Fed chairman nominee for Chairman’s seat. The question was also raised about Warsh’s commitment to keeping the Fed’t 2% inflation target at its core. One in thirteen percent of participants said they were not sure if Warsh would follow this target, and eighteen percent thought he would not be doing so.

Also, the survey noted that “in recent months” has reshaped expectations for cut in interest rates.” While the December survey predicted that the Fed would cut rates in March and September, the most recent survey, conducted between March 6-11 (after the beginning of the Middle East conflict), expects the first cut to be June and the second in October.

*This is not investment advice.

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