The Federal Reserve is expected to lift interest rates to the highest level since 2007 in its intense quest to battle the hottest price surge in four decades, according to the nation’s top economists.
Experts surveyed in Bankrate’s Third-Quarter Economic Indicator poll say policymakers’ key federal funds rate — which acts as a lever for basically all consumer borrowing costs in the economy — will top out at 4.71%, reflecting a target range of 4.5%-4.75%. Rates were last at that level between October and December of 2007, near the start of the financial crisis.
Those moves could also help keep another key borrowing benchmark — the 10-year Treasury yield — at an elevated level a year from now. The average forecast among economists in Bankrate’s poll put the interest rate at 3.79% by September 2023, the highest since 2010.
