PROGRESS in Lending surveyed its 90,000 plus readers and they were all united in how they saw the future trajectory of interest rates. In total, 100% of respondents believe that interest rates will increase this year.
But this is nothing to fear. MarketWatch reports that “A majority of panelists believes that inflation risks are higher than in the past two decades,” said Manuel Balmaseda, president of the NABE and chief economist at CEMEX.
The Fed is aiming for an inflation rate to average 2% over an unspecified period, using a price barometer known as the PCE. The index is the Fed’s preferred inflation gauge.
The Fed itself sees the yearly rate of PCE inflation climbing to as high as 2.4% this year dropping back down to 2% in 2022.
Thomas Barkin, president of the Richmond Fed, said increasing Wall Street DJIA, 1.11% expectations of higher inflation are a natural reaction to an economy that is getting better. He called it a “good thing” as long as interest rates “don’t get out of whack.”
*Respond to the new weekly survey HERE.