The Federal Reserve will keep raising rates into the first half of 2023, according to most bankers polled in a new survey of bankers released today by fintech IntraFi.

The third quarter survey—which polled the top executives at more than 450 banks nationwide—found that 63% anticipated hitting the peak interest rate during the first half of 2023. A quarter of bankers said the central bank would hit its top rate this year, while another 11% predicted that would not happen until the second half of next year.

"Bankers believe the Fed still has a way to go in its efforts to stop inflation," said Mark Jacobsen, Cofounder and CEO of IntraFi. "While they are split about exactly where the peak rate will be, most see several rate hikes ahead."

The Federal Open Market Committee (FOMC) has raised interest rates five times so far this year, including three 75-basis-point hikes at its past three meetings. Although the current federal funds target rate is 3.0% to 3.25%, the FOMC said at its most recent meeting on Sept. 21 that it anticipated it would increase that rate to 4.25% to 4.5% by year-end.

The FOMC is widely expected to raise rates again at its next scheduled meeting beginning on Nov. 1.

In the survey, bankers were divided about how far interest rates would rise. Twenty-nine percent said the peak rate would be 4.25% to 4.5%, while a third of respondents said it would rise to 4.5% to 4.75%, and another 26% said it would go to 4.75% to 5.0%. Eleven percent predicted the federal funds target rate would go above 5%.

Many bankers continued to say that the Fed has raised rates too quickly and too high. In the third quarter survey, 58% of bank executives said the Fed has overcorrected for inflation, down slightly from a quarter earlier, when 62% said the same. However, the number of bankers who said the Fed is on the right track has risen during that same period, jumping to 32% from 21%.

They also continue to overwhelmingly predict an imminent recession. Fifty-two percent said the U.S. is already in a recession or will be by the end of the year, while 36% said it would be in a recession in the first half of next year. An additional 11% said a recession would occur in the second half of 2023. Only 1% did not see a recession anytime soon.

That pessimism was reflected in their outlook for the economic conditions at their own institutions. The percentage who felt that economic conditions at their banks had declined over the previous 12 months rose to 35%, a 7-point increase from the previous quarter. Looking to the future, 67% said they expect economic conditions at their bank to worsen over the next year.