Stay braced for two more Fed hikes in 2017, economists say

WASHINGTON (June 13): The Federal Reserve will increase interest rates twice more in 2017 and begin shrinking its balance sheet before year’s end despite a clear downturn in the outlook for inflation, according to 43 economists surveyed by Bloomberg.

Results of the survey, conducted June 5-8, showed economists expect a rate rise at the end of the Fed’s two-day meeting on Wednesday and another in September, followed by the start of balance-sheet unwinding in the fourth quarter. The economists had previously forecast hikes in June and December. That means expectations for tighter monetary policy firmed slightly even amid falling confidence that the Fed will reach its inflation target any time soon.

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