Fed Holders: Economists Expect No Rate Hikes Through Year-End

A Reuters poll of economists found that most expect the Federal Reserve to keep its key interest rate unchanged next month and through year-end. The majority, 94 out of 104 respondents, predicted no change in rates at the September 15-16 meeting, which aligns with their previous views.

Some market participants have shifted their expectations, with a near-70% chance now favoring a hold instead of a quarter-point hike in September. This shift follows unexpected job losses in July and lower-than-expected consumer price inflation, alongside weaker retail sales.

Economists also forecasted that the U.S.-Iran conflict and oil prices about 25% above pre-war levels could still lead to one rate increase by end-December. However, several Federal Open Market Committee members have signaled tighter policy might be needed if inflation remains elevated.