The Federal Reserve will keep raising its benchmark policy rate, holding it above 5.5 per cent for the rest of the year, despite turmoil across the US banking sector, according to a majority of leading academic economists polled by the Financial Times.
The latest survey, conducted in partnership with the Initiative on Global Markets at the University of Chicago’s Booth School of Business, suggests the US central bank still has work to do to stamp out stubbornly high inflation, even as it contends with a crisis among midsize lenders following the implosion of Silicon Valley Bank.
Of the 43 economists surveyed between March 15 and 17 — just days after US regulators announced emergency measures to stem contagion and fortify the financial system — 49 per cent forecast the federal funds rate to peak between 5.5 per cent and 6 per cent this year.