Federal Reserve Chair Jerome Powell is likely to slow the pace of interest-rate increases after front-loading policy with half-point hikes next week and in June, economists surveyed by Bloomberg say.

They expect the Federal Open Market Committee to raise its benchmark rate by 50 basis points at the May 3-4 meeting and do so again in June -- the first hikes of that size since 2000 -- then downshift to a series of quarter-point moves during the second half of the year. The U.S. central bank will also start to shrink its $9 trillion balance sheet in May.

The survey of 48 economists conducted from April 22 to 27 forecast the Fed will lift rates to a target range of 2.25% to 2.5% by December, while markets are pricing in around 2.75% at year’s end. The last published forecasts by the Fed in March showed rates rising to 1.9% this year and 2.8% in 2023. The economists see Fed rates peaking at 2.88% in December 2023.

The path outlined by the economists’ consensus is far less aggressive than that laid out by some forecasters such as Nomura Holdings Inc., which is projecting 75 basis-point hikes in both the June and July meetings. The most hawkish of the Fed officials, St. Louis Fed President James Bullard, has called for rates of 3% to 3.25% this year and has said a 3.5% rate would be justified.

“As much as this Fed says it will be aggressive, Chair Powell still appears to be more conservative than other members,” Joel Naroff, president of Naroff Economics LLC, said in a survey response. He’s looking for one or two half-point hikes to begin.

The overwhelming consensus among economists for a 50 basis-point hike in May is not surprising, after Powell blessed such a move. “I would say that 50 basis points will be on the table for the May meeting,” he declared on April 21, just before officials entered their pre-meeting blackout period. Several of his colleagues have echoed that sentiment.

The vast majority of economists surveyed saw little appetite for a 75 basis-point hike, which the Fed last delivered when Alan Greenspan was chair back in 1994.

“I would expect the Federal Reserve to return to more serenity” after an initial one or more half-point hikes, as the economy slows, said Thomas Costerg, senior U.S. economist at Pictet Wealth Management. “Financial conditions are tightening faster than the Federal Reserve realizes, in my view, and there will be a major impact on the economy in the second half of the year.”

The Fed is all but certain to announce its plans to allow runoff of maturing securities, another means of tightening monetary policy. The FOMC has outlined plans for maximum monthly reductions of $60 billion in Treasuries and $35 billion in mortgage-backed securities. Economists expect runoff to start in May, with cuts of $20 billion in Treasuries and $15 billion in MBS, reaching the maximum caps over three months.

An overwhelming majority expect officials will resort to outright sales of MBS, in line with their stated preference to only hold Treasuries in the longer run. There’s a range of views on when selling would begin, with a slight majority seeing it start this year.

Powell has emphasized that the Fed 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. Four-fifths of the economists expect the committee to repeat the guidance, while the rest say there may be a signal of consideration of one or more half-point moves.

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