Federal Reserve Rate Hike Expected This Week Amid Stubborn Inflation

A recent industry survey has revealed that over 80% of economists expect the Federal Reserve to raise interest rates this week, marking a significant shift in expectations. The survey's results come after last Friday's release of U.S. official CPI data, which showed stubbornly high inflation.

According to the survey, 86 out of 101 respondents expect the Fed to raise interest rates by 25 basis points to a range of 3.75%, 4.00%. This represents a dramatic reversal from the previous survey, where more than two-thirds of respondents had expected the Federal Reserve to hold interest rates steady in September.

The view that the Federal Reserve will cut interest rates by 2027 no longer holds a majority, with nearly 53% of respondents expecting at least one more rate hike before the end of March next year. The probability of a Fed rate hike this week is close to 90%, with roughly four additional hikes expected by the end of July 2027.