Tags: Fed | rate | interest | funds

CNBC Survey: Wall Street Expects First Fed Rate Hike in June 2015

By    |   Tuesday, 16 September 2014 12:22 PM

CNBC's Fed survey for September of 37 economists, fund managers and strategists shows a consensus forecast that the Federal Reserve will begin raising interest rates in June of 2015, one month sooner than the consensus of the August survey.

That result dovetails with a new survey of fund managers from Bank of America Merrill Lynch, which indicates that 48 percent of those surveyed believe the central bank will increase rates in the second quarter of 2015, up from 38 percent in August.

The Fed has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008.

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In the CNBC poll, the average forecast increased for the fed funds rate at the end of both 2015 and 2016. Respondents believe the Fed will complete its rate hikes in the third quarter of 2017, a quarter earlier than the prior survey, leaving the rate at 3.2 percent.

More than 40 percent of the CNBC respondents anticipate the Fed, in its policy statement Wednesday, will drop the words "considerable time" from its description of how long it will refrain from raising rates after finishing its quantitative easing. However, 24 percent don't see the phrase being dropped until October and another 24 percent see the phrase being dropped as late as December.

To be sure, not everyone is pushing up their estimate of when the Fed will begin boosting rates. Vincent Reinhart, chief economist at Morgan Stanley and a former top official at the Fed, doesn't expect a rate hike until the beginning of 2016.

Once the central bank signals that a rate rise is imminent, financial markets will freak out, and that will cause the Fed to hold back, he writes in a commentary obtained by MarketWatch.

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CNBC's Fed survey for September of 37 economists, fund managers and strategists shows a consensus forecast that the Federal Reserve will begin raising interest rates in June of 2015, one month sooner than the consensus of the August survey.
Fed, rate, interest, funds
317
2014-22-16
Tuesday, 16 September 2014 12:22 PM
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