Wall Street’s biggest banks agree the Federal Reserve will hike US interest rates further into next year, but are at odds over how high it will take them and whether it will be cutting by the end of 2023.

In a reflection of how tough Chair Jerome Powell’s job is becoming, leading economists are split over whether the central bank will need to keep attacking stubbornly high inflation or if the risks of recession and rising unemployment will become bigger concerns.

While there is a broad consensus in predicting the Fed will raise its benchmark rate by 50 basis points to a range of 4.25% to 4.5% in December and then to around 5% by March, that is where agreement over the outlook ends:

• Economists at UBS Group AG see 175 basis points of cuts next year and Deutsche Bank AG predict a percentage point of reductions late in 2023

• Nomura Holdings Inc. projects hikes to 5.75% before a retreat to 5%, while Barclays Plc see 75 basis points of cuts in the final four months of the year

• Morgan Stanley, which sees the peak at 4.75%, and Bank of America look for a quarter point cut in December

• Goldman Sachs Group Inc. and Wells Fargo & Co. anticipate rates peaking at 5.25% and remain there through the rest of the year, while JPMorgan Chase & Co. reckons rates will hit 5% and stick there until 2024.

• Citigroup Inc. sees a peak range of 5.25% to 5.5% hit by mid-2023, and holding there through the rest of the year“Given the uncertainties at play it is understandable that the range of forecasts is so wide,” said Jonathan Millar, a senior economist at Barclays in New York.

Although Powell and his colleagues now sound resolute in signaling they will maintain tight monetary policy to return inflation to their 2% target, from 6.2% in September and 7% in June, Millar said he does “not view that intention as credible in our baseline scenario where inflation comes down rapidly and the economy goes into recession.”

In markets, the Fed is seen raising rates by a half point in December, in line with the economists’ view, with rates peaking near 5% by March with half a percentage point of cuts priced in by December 2023.

Nomura sees the loftiest peak, anticipating the need to fight inflation will force the benchmark in May to 5.75%, which would be the highest since 2001.

UBS is looking for the sharpest policy pivot as it bets on the economy suffering a “hard landing” with unemployment rising to above 5% in 2024.

Its economists note that historically the Fed has changed tack quite quickly once outright job losses are recorded, with the median gap between rates peaking and being cut sitting at just 4.5 months.

In 1984, for example, Chair Paul Volcker’s Fed U-turned in six weeks, going from rapid tightening to over 500 basis points of rate cuts. In 1989, Chair Alan Greenspan kept the federal funds rate at its high for just three weeks, before starting a reduction cycle of almost 700 basis points, while he waited 23 weeks to ease in 1995.

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