Fed could cut rates fewer times than expected as economy keeps growing, according to CNBC survey

Forecasters in the CNBC Fed Survey are increasingly confident that the U.S. economy will avoid a recession and pull off a soft landing, and unlike past surveys, don't even see growth slowing much below potential in the next couple of years.

The potential downside of the better forecast: less Fed easing with the possibility that officials at their meeting this week forecast fewer rate cuts in 2024 than they did in December.

"For now, the narrative that the U.S. economy is so fragile that it cannot survive without ultra-low rates has been debunked and discarded into the rubbish bin of history," wrote John Donaldson, director of fixed income at the Haverford Trust Company, in response to the survey.

The March survey finds the average probability of a soft landing at 52%, up from 47% in the January survey, and the first time that it has been above 50% since the question was first asked in July. The probability of a recession in the next 12 months fell to 32%, the lowest since February 2022, and down from 39% in January and 63% in November.

"The U.S. economy continues to move toward a modest growth and modest inflation environment," said Scott Wren, senior global market strategist at the Wells Fargo Investment Institute. "This may take longer than initial expectations, but the trend is favorable."

The Fed's two-day meeting ends Wednesday, when the central bank is largely expected to keep the federal funds target rate at a range of 5.25% to 5.5%.

Forecasters in general have a bad track record of predicting recessions. The 27 respondents to this survey, among them economists, strategists and fund managers, joined other forecasters in the past year in being fairly certain a recession would hit in 2023. That turned out not to be the