Economists see the Federal Reserve holding off on interest-rate cuts until mid-2024, contrary to market expectations the easing cycle will begin sooner.

Bloomberg’s monthly survey shows the median expectation is for the US central bank to reduce the benchmark rate by 25 basis points at the June 2024 policy meeting, followed by three more cuts in the second half of the year. The benchmark has been in a range of 5.25% to 5.5% since July.

A month ago, economists expected an initial rate cut in July. But a separate Bloomberg survey conducted before the Fed meeting that ended Dec. 13 already showed a first cut in June, indicating the Fed’s pivot had little impact on forecasts.

In contrast, investors are placing more than a 90% probability on the central bank lowering rates at or before its March meeting, with the main rate finishing the year at around 3.77%.

Several Fed officials over the past week have pushed back on speculation that the central bank would lower rates in March.

At the conclusion of their two-day gathering this month, Fed Chair Jerome Powell acknowledged that officials discussed the question of when it would become appropriate to begin easing policy.

The latest Bloomberg survey also showed that economists see inflation cooling more throughout 2024 than they did last month.

They reduced their expectations for one of the Fed’s preferred price measures by about 0.2 percentage point for the next four quarters. The personal consumption expenditures price index is now expected to rise an average 2.3% in 2024, compared with the 2.5% predicted last month, the survey showed.

Forecasters see the economy growing at a strong pace through 2025 in the back of resilient consumer spending and private investment. Combined with more upbeat labor market projections, that suggests economists are confident the Fed could successfully pull off a so-called soft landing — when inflation comes down without major job losses or economic slowdown.

This article was provided by Bloomberg News.