Economists are taking Federal Reserve officials at their word — the first interest-rate increase will come this year, The Wall Street Journal reported yesterday. About 64 percent of respondents to The Wall Street Journal’s monthly survey of economists now say that the Fed’s Dec. 15-16 meeting will culminate with the first rate rise in nearly a decade. Just two months ago, 82 percent of economists polled thought the central bank would raise its benchmark short-term interest rate in September. But then the stock market tumbled, and an array of reports from overseas suggested the global economy was slowing down. The central bank kept rates near zero at its meeting last month, citing the risk that “global economic and financial developments may restrain economic activity” and push the inflation rate even lower. Since that meeting, however, Fed officials including Chairwoman Janet Yellen have said that they still expect the central bank’s Federal Open Market Committee to raise rates this year. Despite assurances, many investors in financial markets remain skeptical. Futures contracts in Chicago imply just a 39 percent probability that the central bank will raise rates this year, according to data from CME Group.
