The Federal Reserve (Fed) is expected to increase interest rates by 75 basis points for the fourth time in a row at the upcoming policy meeting on November 2.
According to a poll by Reuters, economists put this expectation because the central bank should not stop tightening until inflation falls to about half of its current level.
An aggressive tightening cycle also creates a greater risk of recession and this is reflected in the survey where the probability of one happening is increasing.
However, the majority of economists see policymakers raising the benchmark interest rate to 3.75%-4.00% next week as inflation remains high and unemployment is at record lows.
In the meantime, most analysts forecast a 50 basis point hike in December that would take the Fed funds rate to 4.25%-4.50% by the end of 2022.
Overall, Fed interest rates are expected to peak at 4.50%-4.75% or higher in the 2023 quarter.
Consumer inflation is not projected to decrease until the second quarter of 2023, where it is estimated to be 8.1% in 2022, 3.9% in 2023, and 2.5% in 2024 respectively.
