Survey Shows Economists Predict Fed Will Cut Rates Twice This Year

Odaily News According to a Bloomberg survey, economists have postponed their expectation for the timing of the Fed's next rate cut from March to June, but still anticipate two 25-basis-point cuts by the end of this year. The pace of rate cuts expected by the 46 economists surveyed is faster than the path currently priced in by futures markets and includes 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 chairman candidate nominated by Trump. When asked whether they believe Warsh would be committed to achieving the Fed's 2% inflation target, 13% were uncertain, and 18% answered "no." In the December survey last year, 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 would occur in June and October. The survey median shows that economists expect interest rates to be in the range of 3% to 3.25% by the end of this year.