Fed to hike rates by 25 bps in Q4 2017 – Reuters Poll

According to the latest Reuters poll on the US economy and Fed interest rates outlook, a majority of the economists sees the Fed hiking rates in Q4 this year.

Key Findings from the survey:

34 of 57 economists believe the US economic expansion will last 2 years or more, while 23 of them say 1-2 years.

94 of 100 economists say the Fed will announce balance sheet normalization plan in Sept.

Fed must start shrinking balance sheet before inflation hits target, say 55 of 62 economists.

Fed to raise rates by 25bps to 1.25%-1.50% in Q4; hike by 25bps three more times in 2018.

GDP to grow annualized 2.6% in Q2 (2.7% July poll); 2.1%-2.5% Q3 2017 to end-2018 (2.2%-2.5% July).

U.S. core PCE inflation forecast to average 1.5%-1.6% each in the coming quarters this year (same as in July poll).