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Efforts by Fed chair nominee Kevin Warsh<\/a> to satisfy President Donald Trump<\/a>‘s demands for lower interest rates look likely to be stymied by high oil prices and inflation, according to respondents to the latest CNBC Fed Survey.<\/p>\n Respondents on average are not fully pricing a single rate cut this year. Just 58% of the 26 respondents see any rate cut at all. The average funds rate is forecast to decline to 3.5%, or just 0.14 percentage point below the current rate, reflecting a combination of those who forecast one cut or more and those seeing the Fed on hold. For 2027, the average funds rate is forecast at 3.2%, reflecting a bit less than two rate cuts.<\/p>\n “Fed Chair Nominee Warsh will probably be hamstrung delivering Trump the rate cuts the president wants because oil prices and inflation will remain higher than hoped for a long time,” said Rob Morgan, senior vice president and market strategist, Mosaic.<\/p>\n High oil prices<\/a> are seen pushing up inflation by 0.6 percentage point this year while pushing down growth by a half point. And 81% believe crude prices are likely to drive up core inflation as well, compounding the difficulty of cutting rates<\/a> for the Fed. Core excludes food and energy prices because of their volatility.<\/p>\n Zoom In IconArrows pointing outwards<\/p>\n The probability of recession<\/a> remains elevated but little changed from the March survey at 33%. <\/p>\n “The war and its commodity and supply chain impact have left the Fed as just a spectator and I expect to hear from Powell’s presser a lot of ‘we’ll have to see,'” said Peter Boockvar, chief investment officer, One Point BFG Wealth Partners.<\/p>\n Forecasts for the consumer price index<\/a> rose to 3.1%, up from 2.7% before the war. It’s seen falling back to 2.6% next year. By a 69% to 31% margin, most respondents see the Fed looking through the inflation increase and not hiking.<\/p>\n But Diane Swonk, chief economist at KPMG, thinks the Fed should formally change its policy stance. <\/p>\n “The Fed needs to signal optionality on its next move in rates \u2014 it could be up instead of down,” she said. <\/p>\n Growth forecasts have come down steadily since the Iran war began. Respondents see gross domestic product growth at 1.9%, down a half point from the January forecast before a modest bounce back in 2027 to 2.1%. <\/p>\n Zoom In IconArrows pointing outwards<\/p>\n The unemployment rate<\/a> is forecast to tick up modestly to 4.5% from the current level of 4.3% and remain there into 2027. Respondents estimate it takes only 62,000 jobs on average to maintain the current rate. <\/p>\n With rising inflation and the Fed on hold, the S&P 500<\/a> is forecast to be stagnant around the current level for the remainder of the year, before rising more strongly in 2027 to around 7,700. <\/p>\n “U.S. economic resilience, sticky inflation, and ongoing uncertainty argue against rate cuts, irrespective of who is chairing the” Federal Open Market Committee, said Douglas Gordon of Russell Investments.<\/p>\n