Survey of economists: Inflation will stay high this year, and so will Fed’s key interest rate

WASHINGTON (AP) — The Federal Reserve will make only modest progress in its fight against inflation for the rest of this year, even while keeping its benchmark interest rate at a 16-year high, a group of business economists predict in a new survey. The National Association for Business Economics’ survey found that the median forecast is for inflation to average 4.2% this year, up from a 3.9% forecast in the group’s previous survey, conducted in February. That is far above the Fed’s inflation target of 2%. The persistence of high inflation is likely the main reason the business economists expect the Fed to keep its key rate at its current level of roughly 5.1%, its highest point in 16 years.