Economists push back expected Fed rate cut to 2024, poll shows

NEW YORK  – Economists have pushed back their expectations of when the Federal Reserve will cut interest rates and have raised their forecasts for inflation and the strength of the job market, a survey released on Monday showed.

Economists now believe the U.S. central bank, which is debating whether it needs to raise rates again, will lower its targeted policy rate in the first quarter of next year, according to the survey released by the National Association for Business Economics.

In February, survey respondents saw the Fed cutting rates in the final three months of this year. Forecasters maintained their view on the peak level of the Fed‘s benchmark overnight interest rate, which jibes with the central bank’s current target range of between 5 percent and 5.25 percent.

The NABE survey showed respondents split over whether the U.S. economy would fall into recession, although the poll‘s median view sees modest levels of growth prevailing through 2024, with an expected 0.4 percent rise between the fourth quarter of 2022 to the final three months of 2023.

Respondents upsized their estimate of inflation in 2023, seeing the consumer price index up by 3.3 percent from the last quarter of 2022 to the final quarter of 2023, according to the survey. In February, respondents expected inflation would be up 3 percent over the same period.

The survey also found upgraded outlooks for the job market, with respondents now saying they expect an average 142,000 jobs to be gained per month, up from 102,000 in the February survey. The jobless rate, currently at 3.4 percent, is projected to average 3.7 percent this year, down from 3.9 percent in the February poll.

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