90% of US Investors Say "No Interest Rate Cut This Year"

Half of Investors Expect Rate Cuts After Q2 Next Year
60% of Investors Say "Tightening Will Cause Recession"

Seven out of ten American investors expect the Federal Reserve (Fed) to raise interest rates further. Ninety percent of investors do not anticipate a rate cut within the year, and 60% predict that the Fed's tightening stance will lead to an economic recession.

[Image source=Reuters Yonhap News]

On the 14th (local time), Bloomberg's survey service MLIV Pulse surveyed 223 investors, revealing that only 28% responded that the Fed's rate hikes have concluded. The remaining 72% said the Fed would continue its rate hike policy.

Expectations for a rate cut within the year have also faded. Among all respondents, only 9.9% forecast that the Fed would lower rates in the fourth quarter of this year. Meanwhile, 34.5% expected rate cuts to begin in the first quarter of next year, and 55.6% anticipated rate cuts in the second quarter or later, the highest proportion recorded.

This survey was conducted immediately after the Fed announced at the June Federal Open Market Committee (FOMC) regular meeting that it would maintain the benchmark interest rate at 5.0?5.25%. After raising rates ten consecutive times since last year, the Fed paused rate hikes for the first time, signaling a 'hawkish pause' with the possibility of resuming increases next month. In fact, the Fed raised its year-end rate forecast in the dot plot from 5.1% to 5.6%, implying two more possible rate hikes.

Regarding the Fed's tightening stance, 63% of respondents predicted it would cause an economic recession.

Sixty percent of investors said the dollar's value would rise moderately within 5% by the end of the year. The remaining respondents were divided on whether the dollar would rise more than 5% or decline.

Bloomberg reported, "With inflation exceeding twice the central bank's 2% target, policymakers are not yet ready to declare victory in the fight to regain control over prices," adding that "most investors expect more rate hikes."

This content was produced with the assistance of AI translation services.