Economists Predict Faster Fed Rate Cuts Amid Concerns Over Fed Chair Nominee

Economists have adjusted their expectations for the Federal Reserve's next interest rate cut, moving the anticipated date from March to June, according to a Bloomberg survey. However, they still foresee two rate cuts of 25 basis points each by the end of the year. According to Jin10, the pace predicted by the 46 surveyed economists is faster than the current pricing path in the futures market and exceeds the median forecast made by Fed officials last December. Nearly one-third of the surveyed economists expressed concerns about Kevin Warsh, the nominee for Fed Chair by U.S. President Donald Trump. When asked if they believed Warsh would commit to achieving the Fed's 2% inflation target, 13% were uncertain, and 18% responded negatively. In a previous survey conducted last December, economists expected rate cuts in March and September. However, following the outbreak of conflict in the Middle East, the survey conducted from March 6 to 11 indicated revised expectations for rate cuts in June and October. The median forecast from the survey suggests that economists anticipate interest rates to be in the range of 3% to 3.25% by the end of the year.