BENGALURU: The Federal Reserve will downshift in December to deliver a 50-basis-point interest rate hike, but economists polled by Reuters say a longer period of U.S. central bank tightening and a higher policy rate peak are the greatest risks to the current outlook.

U.S. consumer price inflation unexpectedly fell below 8% last month, bolstering already well-established market expectations the Fed would go for smaller rate hikes going forward after four consecutive 75-basis-point increases.

But the latest Reuters poll shows forecasts for inflation in the coming year and into next are slightly higher than thought one month ago, suggesting it is not time yet to consider an imminent pause in the Fed's tightening campaign.

The Fed is set to raise its federal funds rate by half a percentage point to the 4.25%-4.50% range at its Dec. 13-14 policy meeting, according to 78 of 84 economists who participated in a Nov. 14-17 Reuters poll.

The funds rate, which the Fed has raised from near-zero in March in one of its fastest rate-hiking campaigns ever, was widely expected to peak at a minimum of 4.75%-5.00% early next year, 25 basis points higher than seen in last month's poll. Peak rate forecasts ranged between 4.25%-4.50% and 5.75%-6.00%.

But 16 of 28 respondents to an additional question said the bigger risk was that rates would peak higher and later than they expect now, with another four saying higher and earlier. The rest said it would be lower and earlier.

"While markets are focused on peak inflation, underlying inflation trends are persistent. This could force the Fed to keep raising the federal funds rate well into next year and beyond levels currently anticipated," said Philip Marey, senior U.S. strategist at Rabobank.

Several Fed policymakers have signaled rates would go higher than their projections from September and they would have to see a consistent and meaningful decline in price rises to consider pausing the tightening with core CPI running more than three times their 2% target.

While price pressures were seen gradually falling, inflation as measured by the CPI as well as the core personal consumption expenditures (PCE) price index was not seen returning to 2% until at least 2025.

A majority of economists, 18 of 29, also said the bigger risk was that price rises would be bigger than they expected over the next six months.

"While the softer (CPI) report will support the Fed's desire to slow the pace of the rate hikes to 50 basis points in December, we do not see in the report any clear evidence inflation will decelerate convincingly toward the 2% target," noted Andrew Hollenhorst, chief U.S. economist at Citigroup.

"The softer reading does not significantly affect the upside we see to inflation."

The most aggressive tightening cycle in four decades has brought with it a 60% chance of a U.S. recession within a year, according to the poll, roughly similar to last month's survey.

While 22 of 30 economists said the recession would likely be shallow - the economy is forecast to grow just 0.4% next year as a whole - fears of a deeper downturn have prompted companies to cut thousands of jobs across the country.

The unemployment rate was expected to climb from the current 3.7% to 4.6% by the end of next year - with the highest forecast at 5.9% - and average 4.8% in 2024, still well below the levels seen in previous recessions. Jobless rate forecasts were broadly higher compared with the previous month's poll.

"Despite a potentially modest increase in unemployment next year, the economy will most likely be in recession, which will leave the Fed in the unusual position of maintaining a restrictive policy stance during a downturn in the economy," said Michael Moran, chief economist at Daiwa Capital Markets America, who had one of the highest interest rate forecasts in the poll.

(For other stories from the Reuters global economic poll: )

(Reporting by Prerana Bhat; Additional reporting by Indradip Ghosh; Analysis by Sarupya Ganguly; Polling by Milounee Purohit and Dhruvi Shah; Editing by Ross Finley and Paul Simao)