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According to a survey of 42 economists by Financial Times, more than 2/3rd of them has aligned themselves with a rate hike by FED again in March.
In previous articles under the same series name we discussed there are considerable gaps in expectation of hikes for FED next year. While FED's own dot plot is suggesting four 25 basis points hike next year, economists are calling for three and market is pricing two. Our call is for two but with reinvestment policy change (very late next year).
According to the survey more than 50% are expecting FED to strike for third time in June.
Market is now predicating with more than 50% probability that rates will rise in March. Previously it was April. However next hike is being priced deeper next year.
If FED do hike in March, question is how the hike cycle can be called as gradual with still no sign of inflation pickup.
