Economists are increasingly concerned about inflation, with expectations that it will remain at 3.53 percent at the end of the year. The Federal Reserve is expected to continue tightening monetary policy in the near term, with most economists not expecting a rate cut this year. Economists polled by The Wall Street Journal are increasingly concerned about inflation. Economists expect the Federal Reserve to continue tightening monetary policy in the near term.
Economists expect inflation to remain at 3.53 percent at the end of the year. In January, experts expected inflation to be 3.1 percent at the end of 2023. In March, the consumer price index rose five percent, The Wall Street Journal reported.
The Federal Reserve raised interest rates by 0.25 percentage points in March. The latest rate hike took the federal funds rate to between 4.75 and 5.00 percent, the highest level since September 2007, when the global financial crisis erupted. Most economists expect the Federal Reserve to bring the federal funds rate to at least 5.125 percent. Most economists expect the Federal Reserve not to ease monetary policy this year.
“We don’t expect a rate cut this year. Unless the problems around small and medium-sized banks get worse,” said Joe Brusuelas, an economist at consulting firm RSM.
With both interest rates and inflation remaining higher than expected, experts estimated that the country could be hit by a recession over the next 12 months. They expect the downturn to be short-lived and to start in the third quarter of this year.
Last week, the International Monetary Fund (IMF) warned that higher borrowing costs would slow US economic growth this year.
The International Energy Agency (IEA) said on Friday that production cuts by the oil cartel OPEC could boost inflation. OPEC recently decided to cut oil production by about a million barrels.
The Wall Street Journal survey was conducted from 7-11 April and was answered by 62 economists.