“With expectations of more aggressive hiking, and signs in incoming data that housing is on a weaker trajectory, we see slower GDP growth through 2023 and a higher unemployment path next year,” Barclays Plc economist Jonathan Millar said in a survey response.      

The economists’ view on rate hikes isn’t surprising in light of Powell’s public comments. “This is a strong economy and we think it’s well positioned to withstand less accommodative monetary policy, tighter monetary policy,” Powell said May 17.

The Fed chief has emphasized that the central bank will be nimble in its rate-hiking plans and the FOMC in its prior statement offered only loose guidance that ongoing increases would be appropriate. Nine-tenths of the economists expect the committee to repeat the guidance, while the rest say there may be a more aggressive rate signal.

The vast majority of economists also expect a unanimous decision this month, which will include the addition of two new governors, Lisa Cook and Philip Jefferson.

There’s less certainty around plans to shrink the Fed’s balance sheet, which started this month with the runoff of maturing securities. The Fed is phasing in its reductions to an eventual pace of $1.1 trillion a year. Economists project that will bring the balance sheet to $8.4 trillion by year end, dropping to $6.7 trillion in December 2024.

Two thirds of those surveyed say officials will resort to outright sales of mortgage-backed securities, in line with their stated preference to only hold Treasuries in the longer run. Among those expecting sales, there’s a wide range of views on when selling would begin, with a slight majority seeing it start next year.

Wall Street economists have recently been raising more concerns about the potential for recession as the Fed tightens monetary policy amid headwinds including rising energy prices amid Russia’s invasion of Ukraine.

The economists are mixed about the outlook, with 31% seeing a recession as likely in the next two years, 21% seeing some time with zero or negative growth likely and the rest looking for the Fed to achieve a soft landing of continuing growth and low inflation.

“A soft landing will be difficult to achieve with a blunt instrument like the policy rate that also works with a considerable time lag,” said Philip Marey, senior U.S. strategist at Rabobank, in a survey response.

Most economists expect the Fed to halt its tightening altogether with inflation still a bit above the 2% target. Nearly three quarters say they see rate hikes stopping with core inflation, which excludes volatile food and energy, of 2.6% or more.