Fed Holds Rates Steady as Economists Split on Future Hikes
The Federal Reserve is expected to hold interest rates steady at its September 15-16 meeting and for the rest of this year, according to a majority of economists in a Reuters poll.
About 70% of respondents, 65 out of 93, expect the federal funds rate to remain in the 3.50%-3.75% range next week, down from 90% in August.
Economists' conviction around their forecasts has waned since Fed Chairman Kevin Warsh adopted a policy of providing little or no guidance on what's coming next from the world's most powerful central bank.
However, some analysts believe that if there's an upside surprise on inflation data, the Fed may start a hiking cycle. Eli Nir, U.S. economist at TD Securities, said 'If everything plays out as we're expecting, then they'll stay on hold next week. But if there's an upside surprise on the inflation data, they're not going to wait around.'