Wall Street survey: The Federal Reserve is expected to cut interest rates in June, whereas last month the first rate cut of the year was anticipated in March.

According to Bloomberg’s latest monthly survey of economists, economists now expect that the Federal Reserve will not cut interest rates until June at the earliest. Just last month, economists had predicted the first rate cut of this year would come in March. As inflationary pressures have not fully eased and the U.S. labor market shows signs of stabilizing, economists have pushed the timeline for rate cuts further back. The Fed’s preferred inflation gauge is expected to remain above its 2% target at least until mid-next year. After three consecutive cuts to borrowing costs in late 2025, Fed officials generally expect to keep rates unchanged at next week’s meeting. Economists surveyed predict the second and last rate cut of this year will occur in September, consistent with last month’s survey results. Investors have likewise delayed expectations for the Fed to resume rate cuts. According to federal funds rate futures, markets now think the first rate cut is not likely until at least June; a month ago, markets believed a rate cut in April was more likely than no cut. After the strongest back-to-back quarterly economic growth in the U.S. since 2021, the Federal Reserve faces no immediate pressure to cut rates. Additionally, forecasters believe the drag on GDP from a potential government shutdown will be less than previously expected. U.S. fourth-quarter GDP growth is projected at 2.1%, more than double previous economists’ forecasts and in line with the long-term trend of the U.S. economy. As for how quickly to cut rates and by how much this year, there are still internal disagreements among Fed officials, with skeptics mainly concerned about inflation risks. Core personal consumption expenditures (PCE) price index, excluding food and energy, is expected to average 2.7% this year and fall back to 2.2% by mid-2027. Bloomberg surveyed 75 economists from January 15 to 21. During the survey period, threats to the Fed’s independence from the Trump administration continued to intensify. Just days before the survey began, the U.S. Department of Justice issued a subpoena to the Federal Reserve; meanwhile, the U.S. Supreme Court held a hearing this week on whether Trump has the authority to dismiss Fed Governor Lisa Cook. Risk Warning and Disclaimer Markets are risky, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their particular circumstances. Investing accordingly is at your own risk.