The U.S. Federal Reserve will resume rate hikes in December and raise borrowing costs three more times in 2018, a Reuters poll found on Wednesday.
The U.S. central bank will also reduce the size of its asset stock pile by about $1.4 trillion over the next several years as it seeks to restore a normal environment for monetary policy, according to the poll of Wall Street’s top banks taken after the Fed’s latest policy meeting, which ended on Wednesday.
The median projection by primary dealers for the federal funds rate by year end was a range of 1.25 percent to 1.50 percent, up from the current 1.00 percent to 1.25 percent and unchanged from a similar survey in July. Fifteen of the 17 banks responding to the survey expect a rate rise by the Fed’s final meeting of the year in mid-December, while two saw no change.
Looking into 2018, the median forecast among dealers in the survey sees the Fed proceeding with three more hikes that will lift its benchmark rate to a range of 2.0 percent to 2.25 percent, also in line with the previous survey result.
As for the Fed’s nearly $4.5 trillion balance sheet, the dealers see the central bank chopping that down to about $3 trillion. Estimates ranged from a low of $2.5 trillion to as high as $3.4 trillion when the Fed completes what it has called the normalization of its balance sheet.
Reference: Reuters
Read More: http://www.reuters.com/
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