On April 11, Deutsche Bank economists predicted in a report that recent data supports the Fed raising interest rates again.
The hike would take rates to a range of 5% to 5.25%.
Following last week’s strong jobs report and further signs of stabilization in the banking sector, they continued to expect the Fed to raise rates by another 25 basis points at its May 3 meeting and keep rates on hold at 5.125% through year-end, they said.
Futures markets are now pricing in a growing likelihood of a quarter-point rate hike in May, according to the CME FedWatch tool. However, the market predicts that subsequent rate cuts will bring the rate below 5% by the end of the year.