U.S. Outlook: Putting Fed tightening cycles under the microscope

Scott Anderson
Posted by Scott Anderson
Chief Economist

Investors are working overtime to divine not only the Federal Reserve’s next move, but how many more rate hikes we are likely to see in this cycle.

Exterior of the Federal Reserve in winter, with bare trees with loads of branches slightly obscure the building.If you believe the Fed’s own forecast, there will be five rate hikes between now and the end of 2020.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Nov. 16.

Key observations:
  • My forecast: We are expecting three more quarter-point rate hikes by the middle of 2019 and then a pause.
  • The Fed’s record of achieving a soft landing for the economy after an interest-rate tightening cycle isn’t all that good.
  • We have the FOMC starting to cut interest rates again by 2020 — a full nine months after the committee pauses.

Read my full report.

NOTE: There will not be a U.S. Outlook next week; it will return on Nov. 30. Happy Thanksgiving!

Reminder: All comments are moderated prior to publication and must follow our Community Guidelines.

Submit an Idea

[contact-form-7 id="32" title="Share An Idea"]

You are leaving the Bank of the West Blog. Please be aware: The website you are about to enter is not operated by Bank of the West. Bank of the West does not endorse the content of this website and makes no warranty as to the accuracy of content or functionality of this website. The privacy and security policies of the site may differ from those practiced by Bank of the West. To proceed to this website, click OK, or hit Cancel to remain on the Bank of the West Blog.