MNI POLICY: Fed Rate Hike Seen in 2022 By Half NABE's Survey

The Federal Reserve is likely to raise interest rates in either 2022 or 2023, according to respondents in a National Association of Business Economics survey published Monday, showing that expectations for rate hikes have been pushed back despite an outlook for faster economic growth.

Half of a 205-person panel of members saw an interest rate hike in 2022, with nearly 30% seeing a hike sometime in 2023, according to the survey. This is down from August when NABE last conducted the survey. then showing 84% expecting interest rates to be higher by the end of 2022.

The U.S. central bank has been targeting a range of 0.0%-0.25% for the fed funds rate since March 15, 2020, and the Fed said last week that despite rising growth expectations rates are likely to remain at near-zero into 2024, with officials looking for data showing broad-based gains in the labor market.

"Although nearly half of NABE Policy Survey panelists expects the Federal Reserve to raise its short-term interest rate target in 2022, nearly as many expect the Fed to keep its current target until 2023 or later," said NABE President Manuel Balmaseda, in a statement.

Over 60% of respondents said risks to inflation are greater than those seen over the past two decades, while 37% indicated that the risks are not greater, the survey showed. The survey was conducted between February 22 and March 5.