Prerana Bhat and Indradip Ghosh
Bengaluru (Reuters) – Fed to add to 50 At several points in September, economists in a Reuters poll said risks had tilted toward a higher peak, as inflation expectations had peaked and recession fears had grown.
Inflation, still around a four-year high, slowed last month, pushing fed funds futures 9-9 after 48 Adjusted pricing to 48 basis point upward basis point changes for June and July.
Most economists for August. 16- A Reuters poll predicts a half-point rate hike next month, the same as the last poll, which would take the key rate at 2.75%-3.%.
18 225 Respondents expect the Fed to support 90 basis points.
Last month, Federal Reserve Chairman Jerome Powell said in a speech at Jackson Hole next week that “a slower pace of rate hikes may become appropriate.”
Since March and more to come closer to a recession, the survey shows a median probability of 48% higher than in the coming year 29% in July, and 50% chance in two years.
“A recession is a necessary evil and the only way to get where we want to be – people don’t lose all their money because of higher prices,” Rabobank said Philip Marey, senior U.S. strategist at .
“It doesn’t have to be heavy, because typically the Great Recession coincides with a financial crisis, and household balance sheets are currently strong.”
(Graphic: Reuters Social Polling – U.S. Recession Probability: https://fingfx.thomsonreuters.com/gfx/polling/egpbkdwndvq/Reuters%20 vote – %16 US %19 Recession %16probabilities.PNG)
economists say if the U.S. slips into a recession within the next two years, it will be short-lived and shallow. 10 people said it was long and shallow, and only 1 said it was long and deep.
Consumer price inflation is expected to remain above the Fed’s 2% target at least until 2024 – 8.0% and 3.7% this year and next on average – likely to drive The central bank raised its key policy rate into restrictive territory.
Almost75% of participants believe the key policy rate is 3.16%-3.50% or higher, basically the same as the last poll.
Expectations of a slower pace of rate hikes have boosted stock and bond markets over the past week, and financial conditions have eased, adding more pressure to the Fed.
And the median poll put the Fed Funds rate terminal — the level that peaked in the current tightening cycle — at 3. 29%-3.75%, expected in the first quarter 2024, nearly 80% of economists answered additional questions, 2024 37, the risk tends to be higher than their expected ratio.
“Stubborn inflation continues to pose the biggest threat to the economy. Inflation may not fall as planned. In this case, policy rates need to be Tighter, in the 4%-5% range.
“If so, there won’t be much debate about whether the economy can avoid a deep recession. “
The world’s largest economy contracted in the first two quarters of the year, broadly the definition of a technical recession.
However, the official arbiter of recessions in the U.S. National Economy The Bureau of Research also takes into account other factors to formally declare a recession, including employment and real incomes.
Nonfarm payrolls continued to remain strong, with the unemployment rate falling to 3.5% last month, the highest level before the pandemic. Lows, so the economy is expected to grow by an average of 1.7% this year and 1.0% next year.
2022, 2024 and
unemployment rates are projected to average 3.6%, 3.9% and 4.0% respectively which are still very low compared to previous recessions.
(Fo r Additional coverage from Reuters Global Economic Survey:)