Economists Now Anticipate a Fed Rate Cut in 2024

Economists’ expectations have shifted toward the US Federal Reserve’s stance on monetary policy, with the majority of respondents now predicting that the central bank will cut its target rate in the first quarter of next year, the survey released by the National Association for Business Economics showed on Monday.

A survey also found that experts had increased their inflation and labor market strength forecasts.

In February, respondents expected the Fed to lower interest rates in the final three months of this year. Experts’ consensus on the maximum level of the Fed’s benchmark overnight interest rate held steady, in line with the existing target range of 5% to 5.25 % set by the central bank.

In the NABE survey, opinions were divided on whether the US economy could fall into a recession. However, the majority of respondents expected that the economy would continue to grow at a modest rate until 2024, with a growth rate of 0.4% predicted between 4Q22 to 4Q23.

Economists predict a 3.3% annual increase in inflation for consumer prices in 2023, up from their previous forecast of a 3.0% rise.