Bankers have turned pessimistic in their economic outlook for the next year, with most anticipating tougher conditions overall, including higher funding costs and increased deposit competition, according to a new study by IntraFi Network.

In the fintech's latest survey, 46% of bank executives now predict overall economic conditions for banks will worsen over the next 12 months—a stunning jump of 32 points from the first quarter of 2021. Eighty-two percent, meanwhile, expect their funding costs to be moderately or significantly higher during the next year, an increase of 54 percentage points from the same point a year earlier. Similarly, those that expect deposit competition to increase jumped 32 points to 60% during the same time period.

"Bankers are rightly worried about the impact that rising inflation and higher interest rates are going to have on the economy," said Mark Jacobsen, the Cofounder and CEO of IntraFi Network. "The situation has changed markedly since a quarter ago."

Bankers also doubt the Federal Reserve's ability to guide the economy to a soft landing. Fifty-two percent said the central bank is in danger of raising rates too fast and too high, while 21% said the Fed will not raise rates fast enough. The survey, which received responses from CEOs, presidents, and CFOs at 422 unique banks across the country, was in the field in early to mid-April, after the Fed raised rates by a quarter percentage point at its March meeting but before it enacted a half percentage point increase in early May.

Many bankers are now likely to begin raising deposit rates. Nearly 40% of respondents said they would begin raising their deposit rates once the Fed hiked the federal funds target rate by at least another half a percentage point, a threshold that was crossed at the May meeting. An additional 38% said they would wait to raise rates until the Fed increased its target by three-quarters of a percentage point. The Fed is widely expected to enact another half percentage point increase at its June meeting.