Market Insider

Fed doves expected to fly even with rate hike coming

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Markets hope to hear from a dovish Fed Wednesday, even though Fed Chair Janet Yellen may send a strong message that the central bank is likely to raise interest rates this year.

The Fed is widely expected to hike rates for the first time in nine years in September. Ninety-two percent of the participants in CNBC's Fed Survey expect the central bank to begin raising rates this year, and the consensus is for 53 basis points this year, which would be the result of two quarter-point hikes.

"Our expectation is that the Fed is going to reiterate a desire to hike interest rates this year and signal it expects two hikes this year," said John Bellows, portfolio manager at Western Asset Management. "Next year, they are currently expecting something like four rate hikes. I don't think that's going to change. I think its two hikes in 2015 , four hikes next year."