Survey Shows Economists Predict Fed to Cut Rates Twice This Year

Odaily According to a Bloomberg survey, economists have postponed their expectations for the timing of the Fed's next interest rate cut from March to June, but still anticipate two 25-basis-point cuts before the end of this year. The 46 economists surveyed expect a faster pace of rate cuts than the path currently priced in by futures markets, and one more cut than the median forecast of Fed officials in December last year. Among the surveyed economists, nearly one-third expressed concerns about Kevin Warsh, a potential Fed chair nominee by Trump. When asked whether they believed Warsh would be committed to achieving the Fed's 2% inflation target, 13% were uncertain, and 18% answered "no." In the December survey, economists expected the Fed to cut rates in March and September, while in the survey conducted from March 6 to 11 (after the outbreak of the Middle East conflict), respondents anticipated the cuts to occur in June and October. The survey median shows that economists expect the interest rate to be in the range of 3% to 3.25% by the end of this year.