Most economists narrowly expect the U.S. Federal Reserve to hike rates next week and nudge its peak interest rate up slightly in a continuing response to high inflation despite concerns that a banking crisis could have broader economic impact.
The Federal Open Market Committee will raise rates by a quarter point at its March 21-22 meeting and at its next two gatherings to a 5.25%-5.5% range, according to economists surveyed by Bloomberg News. Chair Jerome Powell had hinted last week at an even more aggressive stance as he said the policy group might raise interest rates higher than previously expected and at a potentially faster pace, meaning by a half point or more.
The FOMC’s median projection in its quarterly "dot plot” is expected to show the policy benchmark at 5.4% at the end of 2023 — a quarter point higher than what economists expect the actual rate to be — compared to 5.1% seen in December. That would deliver a hawkish surprise to investors, who as of Thursday morning saw a peak at 4.9% in May and expected roughly a full percentage point of cuts during the remainder of the year.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.