Fed May Lift Interest Rates to 8%-9%, Economist Says

The big question raging through financial markets is how much more the Federal Reserve will raise interest rates.

Since it began its rate-hike campaign in March, the Fed has lifted the federal funds rate by 375 basis points (3.75 percentage points), to a range of 3.75% to 4%. In September, Fed officials predicted that the rate will peak at about 4.6% next year.

But in November, Fed Chairman Jerome Powell said the Fed may have to go further than expectations. And now experts, including interest-rate traders, have coalesced around a forecast of 5%.