(Bloomberg) – The Federal Reserve will not ease interest rates if base inflation softens, according to a new Bloomberg survey by economists, contrary to investors expecting the central bank to lower later this year.
Respondents from the 23rd to 25th April survey showed that the target range for the reference rate of federal funds remains right where it is – until – by 2020, according to the average expectations. Only two of the 39 economists surveyed forecast a rate cut in 2019. Interest rate futures, on the other hand, have shown that investors have received a probability of about 60 percent to reduce the rate by December.
Economists and market participants expect the makers of the Bank's policy makers not to change rates when they gather two days next week in Washington. A 2:00 am on the statement of May 1 will be followed by 2:30 am. press conference with President Jerome Powell. Officials will not update their quarterly forecasts, including the interest rate projection item, until their next meeting in June.
In response to other survey questions, economists have made it clear that they do not believe the Fed will be in a hurry or to climb or shrink when the economic conditions develop.
"The Fed will sit tight in the foreseeable future," said Ryan Swit, head of the Moody's analytical research monetary policy survey.
Sweet said the Federal Reserve will be most guided by inflation in the coming months due to concerns that price pressures are being pursued below the target of 2 percent. But he did not expect that further reduction of the central bank's preferred rate of core inflation would result in a reduction, unless it is significant and sustainable.
Economists have rejected the idea that President Donald Trump influenced the Fed, with 69 percent saying that his repeated criticism of monetary policy had no influence on central bank decision-making.
Two-thirds of the respondents also said they did not think it was likely that Stephen Moore, who Trump said he would nominate an open seat in the Fed's governing board, would ever be confirmed in this position. If confirmed, however, the narrow majority says Moore will influence policy in the direction of bargaining.
Moore, a former Trumpp campaign consultant and economic commentator, said the increase in the Fed's quarterly rate rate in December was a mistake and that officials should cut rates by half a percentage point.
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