The CNBC Fed Survey, which includes insights from 30 fund managers, strategists, and economists, reveals that 93% expect the Federal Reserve to maintain current interest rates during its upcoming meeting. However, 76% predict a rate hike in December, with many anticipating an average of two hikes next year.
Richard Bernstein from Janus Henderson Investors criticized the Fed's hesitancy to raise rates despite strong nominal GDP growth and rising inflation indicators. The survey also highlights that 70% of respondents view inflation as a broader issue beyond energy prices.
Current forecasts suggest U.S. crude oil prices will rise to $88 per barrel in six months, while GDP growth is projected at 2.4% for this year. The likelihood of a recession in the next year is estimated at 26%, a slight decrease from previous assessments. The S&P 500 index is expected to stabilize around 7,600 this year but is projected to decline to 8,033 next year.
Concerns about high bond yields are prevalent, with respondents attributing them to factors such as inflation and government debt. Additionally, the upcoming congressional elections are seen as a potential market risk, with 63% of respondents indicating that legal challenges could create uncertainty regarding congressional control.
Overall, the survey reflects a cautious outlook on the economy, balancing inflation concerns with growth expectations