Survey: Vast majority of economists say Federal Reserve will raise interest rates this year

The vast majority of business economists expect the Federal Reserve will raise interest rates before the end of the year, according to a survey released Monday.

Minutes from the Fed's meeting in late July showed that officials could raise rates as early as September. Seventy-seven percent of survey respondents believe the Fed will raise rates from their current near-zero levels, but only 37 percent of respondents believe it will happen as soon as next month.

The survey was done by the National Association of Business Economics. When it surveyed its members in March, 71 percent of economists believed the Fed would raise rates in 2015.

"A large and growing majority of business economists expects the Federal Open Market Committee (FOMC) to raise its target for the federal funds rate before the end of 2015," NABE President John Silvia, chief economist at Wells Fargo, said in a statement.

With only two more appropriate Fed meetings left in 2015, most NABE economists believe the Fed will raise rates at their December meeting. The Fed's next scheduled meeting is September 16 and 17, which will be followed by a news conference by Fed Chair Janet Yellen. Fed policymakers have said they greatly prefer raising rates at a meeting where a news conference is scheduled. The next one would be December 15 and 16.

If the U.S. economy continues to improve at its current pace, economists say the Fed's interest rate will eventually top out at 3 percent. Inflation is also expected to remain relatively low, according to the survey, with 73 percent of respondents expecting inflation to rise to 2 percent — the Fed's goal — by 2019.

Half of economists surveyed believed the government's current spending levels were "about right" while 29 percent said government spending was "too restrictive."

A slight majority of economists said policymakers should look at places like Medicare and Medicaid, defense spending and other entitlement programs as places to cut spending long-term.