The U.S. Federal Reserve will restrain its interest-rate hiking policy in 2019, according to attendees of the Institute of International Finance's annual conference in Bali, Indonesia, on Oct. 12, although the market sell-off of equities earlier in the week suggests a rate rise in December is priced in by investors.

The U.S. stock market, long seen as overvalued by some market commentators, has slumped in recent days as equities are less valuable when interest rates rise. The Dow Jones Industrial Average shed more than 5% between late Tuesday and when markets closed on Thursday, before market started recovering on Oct 12.

The Fed's rate hiking policy drew the ire of President Donald Trump who, earlier this week, labeled the Fed "loco" in its measures to cool the booming U.S. economy, a move at odds with Trump's fiscal policy to accelerate growth.

The federal funds rate is forecast to climb to around 3.4% by the end of 2020, according to Fed officials, but attendees of the Bali conference were unconvinced.

"Definitely one [rate hike] in December, unless there's some sort of zombie apocalypse that stops everything," said Joachim Fels, managing director and global economic adviser of Pacific Investment Management Co.. However, he said the Fed will have to temper its hiking cycle in 2019, suggesting the Fed's dot plot is "a blue sky scenario" and there are "more potholes next year, so only two rate hikes next year."

Société Générale chief economist Michala Marcussen said the depreciation of the U.S. dollar in 2017 "probably canceled out 75 basis points" of Fed rate hikes, whereas this year, the dollar appreciation is amplifying what the Fed is doing. "A stronger dollar could refocus the Fed's mind," Marcussen said.

The recent sell-off in U.S. Treasurys occurred as the market appears to have been convinced that the Fed will raise rates again before the end of the year.

Randall Kroszner, a former board of governor member at the Federal Reserve System and now a professor of Chicago's Booth School of Business, said the Fed may be behind the curve, considering unemployment is below 4% and inflation is slightly above the 2% target. He expects at least a further two rate rises in 2019 despite the president's objections. "There's a long history of the Fed ignoring what the presidency says, and I think this will be a continuation of that," he said.

But Janet Henry, global chief economist at HSBC Holdings, said the Fed may even introduce rate cuts by the end of 2020. "Fed gets to neutral at the end of the year, goes slightly restrictive, the effects of the stimulus wear off. Rate cuts by the end of 2020," she said.