Fed interest rates forecast
Are interest rates going up or down? Stay on top of the Fed's interest rate decisions with predictions and insights from experts.
The Federal Reserve has had six meetings so far in 2023, raising rates in February, March, May, and July, while holding rates at its June and September meetings.
With the October/November Federal Open Market Committee (FOMC) meeting upon us, Finder’s panel of experts all believe the Fed will hold rates steady.
But what can we expect from the next meeting? Finder spoke with industry experts to find out what they think the Fed will do, with all expecting rates to hold at the October/November 2023 FOMC meeting.
What will the Fed do with interest rates at its next meeting?
The majority of panel members expect the Fed will hold rates at its next meeting. Cynthia Wylie, partner and co-founder of the Project Consultant, says with the way that the US economy is performing we shouldn’t expect to see rates start coming down until sometime next year.
The economy is still hot and GDP is still going up fueled by consumer purchases. I think the FED will hold rates steady until the first quarter of 2024 when they will decrease the rate to help the lending sector.
Investment Banker, Howard Yaruss, says that the Fed won’t raise rates for myriad reasons:
“I cannot see the Fed increasing rates since the inflation rate is almost back to its 2% target and we have student loan payments resuming, the Covid assistance waning, and the toll an unstable world takes on the economy.”
Senior analyst for digital assets at Finder, Frank Corva, also sees the Fed rate holding but says while he thinks the Fed will hold rates it should be looking to cut them.
“Holding rates higher for longer is starting to have counterproductive effects. The rate of CPI is increasing again despite the high Fed Funds rate, while the US national debt is increasing at almost $1 trillion per year as a result of the high rates.”
The economy is still hot and GDP is still going up fueled by consumer purchases./blockquote>
I cannot see the Fed increasing rates since the inflation rate is almost back to its 2% target.
Holding rates high while the US debt to GDP ration is 130% has proven to be a dangerous endeavor.
Looking further ahead, the majority* of the panel see the Fed holding and decreasing rates.
How much SHOULD the Fed increase or decrease rates?
60% of panelists said the Fed SHOULD hold rates at their current level.
When do you think the fed rate will peak?
The majority of the panel (67%) panel think that the Fed rate will October/November 2023, while 33% say it has already peaked.
As to what the Fed funds rate will be at it’s peak, the all members of the panel believe that 5.5% is the number.
From the perspective of individual Americans, our panel has a fairly pessimistic outlook for a range of economic indicators over the next six months. The entire panel say that household debt to rise and cost of living is going to increase.
When will inflation return to 2%?
If you were hoping for the inflation rate (currently at 5.5% since the September meeting) to return to the Bank’s target range of 2% anytime soon, our panel has some bad news for you with only 67% of panelists not expecting rates to return to 2% until at least Q4 2024.
Will the US enter a recession in 2023?
The majority of the panel (67%) see a recession in the next 12 months as somewhat unlikely.
Soft economic indicators
The panel is trending fairly neutral to negative on how they feel about the future of various soft economic indicators.
Upcoming FOMC 2023 meetings
The September 19-20, 2023 FOMC meeting is the sixth FOMC meeting for 2023.Photo by Alex Bierwagen on Unsplash
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