85 of 102 economists forecast a 50 bps rate hike in May56 of 102 economists forecast a follow-up 50 bps rate hike in JuneFed funds rate now expected at 2.00% – 2.25% at the end of the year (previously 1.50% – 1.75%)Fed funds rate then expected to be at 2.50% – 2.75% at the end of 2023That’s quite the aggressive view but I guess it reflects what we’re hearing from Fed policymakers recently. But again, how exactly will the economy take to all this when rate hikes aren’t exactly the solution to rampaging inflation? I still don’t see how the Fed can get away with an unimpeded path to hike towards 2% considering the economic backdrop.If they do get there, it’s going to be a short-lived one if anything else as rate cuts are surely going to return to the table soon when the economy stutters. Some analysts in the poll are already calling for that in Q4 2023.ING economist, James Knightley, says that:“Given the shift in official commentary with inflation pressures visible throughout the economy, we believe the Fed will deliver half-point interest rate increases at the May, June and July policy meetings. With the Fed seemingly feeling the need to ‚catch up‘ to regain control of inflation and inflation expectations, a rapid-fire pace of aggressive interest rate increases heightens the chances of a policy misstep that could be enough to topple the economy into a recession.“The Reuters poll also shows a median 1/4 chance of a recession in the US during the coming year, with the odds rising to 40% in the next 24 months.