Fed to hike rates in 2023 but dots won’t show it – Bloomberg survey
|Heading into the US FOMC monetary policy meeting, the latest Bloomberg survey of economists shows that the Federal Reserve (Fed) is likely to raise interest rates in 2023 but the dot plot forecasts won’t show such a potential move this week.
Key findings
“Economists surveyed by Bloomberg News see two quarter-point hikes in 2023. But they also expect the US central bank’s own forecast, released at the same time as its policy statement Washington on Wednesday, will show the median Fed official projecting rates staying on hold near zero throughout that year.”
“The committee, making its first quarterly economic forecasts of the year, will raise its estimates of 2021 growth and edge up the inflation call, while not bringing forward a winding down of asset purchases or interest-rate hikes.”
“The Fed’s closely watched forecasts are likely to show gross domestic product increasing 5.8% in 2021, the survey found, up from 4.2% in the Fed’s December projections. Inflation is seen slightly higher than three months ago, with the unemployment rate falling to 5.0% at year’s end, the same as in the December projections.”
“The FOMC is likely to continue to forecast near-zero rates through 2023, though it’s a close call, with a third of economists surveyed looking for a median Fed projection of higher rates by then.”
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