• Economists raise PCE price projections through the middle of 2024
• Terminal fed funds rate seen reaching 5.25% at May meeting

Inflation that is proving increasingly stubborn will prompt the Federal Reserve to raise interest rates to an even higher peak level and hold them there through the year, according to economists surveyed by Bloomberg this month.

Forecasters boosted their projections for the Fed’s preferred inflation gauge — the personal consumption expenditures price index — for every quarter through the first half of next year. The metric is now seen averaging 2.4% on an annual basis in mid-2024 compared to 2.3% last month. They see a similar sluggishness in the subsiding of the consumer price index.