Fed to skip October but raise rates again in December, nearly all economists say
TLT•Ninety-four of 100 economists expect the Fed to hold rates at 3.75%-4.00% in October, while all 100 expect a December hike. Nearly 60% see rates peaking at 4.00%-4.25%, but 38 of 92 forecast at least two more increases.
1. October hold expected
Ninety-four of 100 economists polled expect the Federal Reserve to hold its federal funds rate in a 3.75%-4.00% range at its October 27-28 meeting. All 100 expect a rate hike in December, reversing last month's poll, when fewer than half forecast an increase.
2. Risks tilt toward hikes
Nearly 60% of forecasters expect the policy rate to peak at 4.00%-4.25%, while 38 of 92 predict at least two further increases, up from one-fifth in September. The poll median projects the Fed's preferred inflation measure will remain more than 100 basis points above its 2% target over coming quarters and not return to target until at least 2028.
3. Growth and inflation outlook
The economy grew at a 2.2% annualized pace in the second quarter and is forecast to have expanded 3.2% in the third quarter, before slowing to 2.2% in the fourth. Economists forecast annual growth of 2.3% this year and 2.1% in 2027.
