And 39% said rates would increase twice this year.
Hunker down, rate hikes are coming.
According to a whopping 75% of economists surveyed by the National Association for Business Economics, the Federal Reserve will hike interest rates before the year is out—even if it’s not this month.
The 252 economists surveyed by NABE were less in agreement about how many hikes the Fed will enact. 39% said rates would increase twice this year, 24% projected one hike, and 17% said three hikes.
“While slightly more than half of survey respondents believe that the current monetary policy stance of the Fed is ‘about right,’ nearly 31% indicate that current policy is too stimulative,” said NABE President Emsbo-Mattingly in a statement.
35% of respondents expect the Fed’s fund target rate will be at 1% by the end of the year, while 64% believe that the year-end target rate will be below 1%.
Most of the economist surveyed are also optimistic about U.S. inflation data, with 76% expecting the metric to be near the Fed’s 2% goal five years from now. 13% expect inflation numbers to exceed the goal, while another 6% expect significantly lower inflation figures.
Back in December, the Fed hiked interest rates for the first time in seven years to 0.25%. The also outlined plans to enact another four hikes throughout 2016 at a rate of 25 basis points per hike.
But the rocky market outlook since the start of 2016—including global market volatility and recession fears—has raised questions about whether the Fed’s path to rate normalization has shifted.
The next Fed meeting is scheduled for March 15 through 16.