Economists in new survey expecting at least two more increases in interest rates

Economists are expecting the U.S. Federal Reserve to raise interest rates at least two more times in the coming months, according to a new Reuters poll.

A majority of economists said that they expect two more increases in interest rates and no cut by the end of the year, according to the poll. More than half of the economists in the survey predicted that there will be two more 25 basis point hikes in both March and May.

These hikes would result in a 5.00 percent to 5.25 percent interest rates, which the survey says its 25 points higher than the majority of respondents predicted that the peak would be. Thirty-seven respondents responded to an extra question in the survey, will all of them saying that the “bigger risk” was the chance that interest rates could peak higher than that.

More than two-thirds of the respondents said that there would be no cut to interest rates this year and that inflation will remain above the target until 2024. Of that group, only one-third of the respondents said that interest rates would peak at 4.75 to 5.00 percent and would stay there until the end of the year. Two-thirds predicted that there would be one cut by the end of the year, according to the poll.

Twenty-one of 35 economists in the survey said that a” significant fall in inflation” would cause a rate cut, and 14 said a “significant rise in unemployment,” would result in a rate cut.

The survey was conducted among 86 economists between Feb. 8 and Feb. 13.