According to the latest Wall Street Journal survey of economists, the Federal Open Market Committee is going to keep on keeping on for a while. This is from Friday's edition (page A1 in the print version):
The 56 economists who participate in The Wall Street Journal's semiannual economic survey and submitted their forecasts between June 10 and June 17 say the Fed isn't done yet, though the pace of rate increases could slow. They expect the Fed to raise the rate three more times in the next 12 months, bringing it to 4%.
As of now, we can only peer through to October via the market for options on federal funds futures, but it does appear that last week the people with their money on the line were coming to the same conclusion. Specifically, the calculated probability of another 50 basis points by October (which is just on the other side of the August and September meetings) took a substantial leap.
We'll see if it sticks.
Here's the data, in Excel and Power Point:
Download implied_pdfs_for_ovtober_050705.xls
Download imp_pdf_slides_for_blog_070105.ppt
UPDATE: William Polley reacts.
UPDATE 2: Professor Hamilton reacts as well. (And provides some universally good advice for 16 year olds.)