Fed Holds Rates Steady, But Hike Expectations Rise
The Federal Reserve is expected to hold interest rates steady at its upcoming meeting on September 15-16, according to a majority of economists in a Reuters poll. This decision would defy market expectations for a series of hikes and marks a shift from the previous reading, where 90% of economists predicted rates would remain unchanged.
About 70% of economists, or 65 out of 93, expect the federal funds rate to stay within the 3.50%-3.75% range next week, down from 90% in August. The rest predict a quarter-percentage-point increase, which would be the first since July 2023.
Among primary dealers, the split is closer on whether or not the Fed will raise rates this year. Half of those polled expect rates to remain on hold this year, while 10 expect at least one hike and one contributor expects a rate cut.