Economists Forecast Federal Reserve Interest Rate Hike in December
A Reuters poll shows all 100 surveyed economists expect the Federal Reserve to raise interest rates in December amid persistent inflation.
Economists now unanimously expect the Federal Reserve System to raise interest rates in December, according to a Reuters poll conducted from October 16-20. This forecast marks a significant shift from the previous month, when fewer than half of the 100 respondents anticipated a hike.
The shift follows a period of persistent inflation that has remained above the two percent target for nearly six years. Contributing factors include high energy costs and new tariffs resulting from the U.S.-Israeli war with Iran. The Federal Open Market Committee previously raised rates by 25 basis points in September.
For the upcoming meeting on October 27-28, 94 percent of polled economists expect the federal funds rate to remain unchanged at 3.75 percent-4.00 percent. While the market anticipates a December move, Federal Reserve Chair Kevin Warsh has remained silent on future guidance, and other officials have signaled a slower approach to further increases.
