Central Banks
Fed Expected to Keep Peak Rates for Longer, Dashing Hopes for 2023 Cuts
- In economists’ survey, Fed to keep rates high all next year
- FOMC growth estimates to be cut as global recession looms
Jerome Powell has argued that higher rates are necessary for longer, even amid economic weakness, to push down prices pressures.
Photographer: Al Drago/BloombergThis article is for subscribers only.
The Federal Reserve is set to disappoint Wall Street as it keeps rates at their peak throughout 2023, dashing hopes markets have priced in for rate cuts in the second half and making a recession very likely.
That’s the forecast of economists surveyed by Bloomberg ahead of a decision and forecasts due from the Federal Open Market Committee on Wednesday. Policymakers will raise rates by 50 basis points next week, following four consecutive 75 basis-point hikes, and by quarter points at the following two meetings, the survey found. Policymakers will announce their decision and forecasts at 2 p.m. in Washington.