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Economists and Markets Diverge Sharply on Fed Rate Hike in September
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A survey conducted between September 4 and 9 reveals that most economists expect the Federal Reserve to keep interest rates unchanged at its September 15-16 meeting and through the end of 2027, despite rising market expectations for a rate hike. Among 48 economists surveyed, only 13 predicted a rate hike this month, while investors assign a 70% probability to a hike next week. Economists cite moderating inflation and the approaching U.S. midterm elections as reasons for policymakers to hold rates steady. The divergence reflects unusually high uncertainty about the near-term direction of monetary policy under Fed Chair Warsh. Yelena Shulyatyeva, Senior U.S. Economist at The Conference Board, expects the Fed to maintain rates at its September, October, and December meetings but warns that any uptick in inflation could alter this outlook. She noted that if inflation data clearly points to acceleration, the Federal Open Market Committee will be forced to act, regardless of the timing of the midterm elections.
Source report
September 11 — Most economists expect the Federal Reserve to keep interest rates unchanged at this month’s meeting and through the end of 2027, despite rising market expectations for a rate hike.
According to a survey, economists cite moderating inflation and the approaching U.S. midterm elections as reasons for policymakers to hold rates steady at their meetings on September 15–16 and in October.
Of the 48 economists surveyed between September 4 and 9, only 13 anticipated a rate hike this month. This stands in stark contrast to investors, who assign a 70% probability to a rate hike next week, possibly reflecting unusually high uncertainty about the near-term direction of monetary policy under Fed Chair Warsh.
Yelena Shulyatyeva, Senior U.S. Economist at The Conference Board, expects the Fed to maintain rates at its September, October, and December meetings but warns that any uptick in inflation could alter this outlook. She noted that if inflation data clearly points to acceleration, the Federal Open Market Committee will be forced to act, regardless of the timing of the midterm elections.
Source
thsNeutral / independent