Fed to raise rates once more in December as inflation risks stay high
TLT•All 101 economists in a poll expect the Fed to raise rates by 25 basis points in December, to a 4.00%-4.25% range. Most expect that move to end the current hiking cycle, while October consumer prices rose more than expected.
1. December hike forecast
All 101 economists polled from November 6-10 expect the Federal Reserve to raise rates by 25 basis points in December, taking the federal funds rate to a 4.00%-4.25% range. The Fed raised rates in September and paused in October.
2. Inflation risks persist
Fifty-six of 101 forecasters expect the December increase to be the last in the current cycle; 45 see at least two more increases. Twenty-nine of 37 economists answering an additional question said their medium-term inflation outlook had not changed since the midterm elections. Both headline and core consumer prices rose more than expected in October.
3. Growth and inflation outlook
Poll medians put the Fed’s preferred inflation gauge above its 2% target over coming quarters, with a return to target not expected until at least 2028. The economy is forecast to grow 2.2% this quarter and 2.4% this year, with AI-driven investment contributing to third-quarter growth.
