The United States Central Bank will raise its key monetary policy rate to above 4 percent and keep it at that level beyond 2023 in an effort to combat high inflation.
The latest survey, conducted in partnership with the Global Markets Initiative at the University of Chicago Booth School of Business, shows that the Federal Reserve is still a long way from plans to end its monetary policy tightening campaign.
The Federal Open Market Committee has raised interest rates this year at the fastest pace since 1981 and is expected to decide on a third straight hike of 0.75 percentage points on Wednesday. The move would widen the target range, which was close to zero until March, to between 3 percent and 3.25 percent.
Nearly 70 percent of the 44 economists surveyed between September 13 and 15 believe the Fed funds rate during this tightening cycle will peak at between 4 and 5 percent.
Although the Fed typically aims to maintain a 2 percent rate for the personal expenditure price index for core consumption, which excludes volatile items such as food and energy, the bank also closely monitors the consumer price index.
Inflation rose unexpectedly in August, with the core indicator rising 0.6 percent over the month, or 6.3 percent from a year earlier.
Falling price pressures, financial market volatility and worsening labor market conditions are the most likely reasons to prompt the Fed to end its tightening policy campaign, but no cut in the funds rate is expected of the FED until 2024, according to 68 percent of respondents. Of this figure, a quarter do not expect the Fed to cut its key policy rate until the second half of 2024.
