Fed Rate Hike Chances Sink Amid Economic Uncertainty

US economists are largely in agreement that the Federal Reserve will not raise interest rates this year. A recent Reuters poll of 104 economists found that 94, or 90%, expect the Fed to keep its benchmark rate unchanged at 3.50% to 3.75% at its September meeting.

However, this view is more dovish than what's currently priced in by interest-rate swap traders, who see a 70% chance of no change in September and one rate increase before the end of the year.

The economists' forecast for no rate hike this year is based on recent economic data, including an unexpected decline in July employment and steady consumer-price inflation. Despite these factors, some economists still expect a rate increase in September, citing concerns about inflation.