U.S. Federal Reserve policymakers believe that overcoming inflation may require raising interest rates again this year. They expect interest rates to reach 5.1% by the end of the year, as they currently range between 4.75% and 5.0% following a 25 basis point increase on Wednesday, according to the average forecasts in the latest quarterly economic projections summary released by the Fed.
The predictions among the 18 Federal Reserve policymakers varied. Ten policymakers anticipated an increase of another quarter percentage point by the end of this year, while seven others saw the possibility of raising rates to a higher level. Only one member indicated that there would be no need for further rate hikes.
The benchmark interest rate is expected to stabilize at 4.3% next year, based on the average forecasts. Four policymakers predicted that rates would reach 5.1% or higher, while another four expected rates to remain below 4% next year. Policymakers viewed the inflation rate as likely to decrease to 3.3% in the last quarter of this year, thanks to the Federal Reserve's decisions to raise interest rates.
