11/22/2023 0 Comments Fed next meeting date 2017Nearly two-thirds of respondents to a separate question, 27 of 41, expected a U.S. The strong labor market is only expected to loosen slightly, nudging up the unemployment rate to 4.0% from the current 3.6% by the end of 2023, the poll showed.Ī slight majority of economists who answered an additional question, 14 of 23, said wage inflation would be the most sticky component of core inflation. (and) to truly crack core will likely require a more significant slowing in the economy." "As the disinflationary force of lower energy prices fades, that will leave us dealing with the underlying 4% trend in core. "While the latest figures are encouraging, the real battle begins now, as the easy base effects are now behind us," said Doug Porter, chief economist at BMO Capital Markets, referring to the fact inflation plunged so much in June partly because it was so elevated at the same time last year. The Fed targets inflation as measured by the Personal Consumption Expenditures index (PCE) at 2.0%, last reported at 3.8% for May.īut none of the inflation gauges polled by Reuters - CPI, core CPI, PCE and core PCE - were expected to reach 2% until 2025 at the earliest. Indeed, economists are still concerned that inflation might not come down quickly enough.Ĭore inflation, which strips out food and energy prices, will be only slightly lower or remain around the current level of just under 5% by the end of the year, 20 of 29 respondents to an additional question in the poll said. A weaker greenback is likely to make imports costlier and keep price pressures elevated. The latest "dot-plot" projections from members of the central bank's policy-setting Federal Open Market Committee suggest the benchmark overnight interest rate will peak at 5.50%-5.75%, but only 19 of 106 economists polled by Reuters forecast it will reach that range.Įxpectations the Fed is nearing the end of its hiking cycle have pushed the dollar to its lowest level in more than a year against major currencies.
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