Reuters poll: nearly all economists see Fed skipping October, hiking again in December; 38 of 92 expect two or more hikes
What happened
A Reuters poll of 92 economists published Tuesday found nearly all expect the Federal Reserve to skip a rate move at the October 27-28 meeting but raise rates again in December. Nearly 60% of forecasters see the policy rate peaking in a 4.00%-4.25% range, while 38 of 92 predict at least two further rate increases — up from just one-fifth in the September survey. Morgan Stanley's chief U.S. economist Michael Gapen warned 'the risks are in the direction of a Fed that ultimately needs to hike rates more than we expect,' and one strategist said the risk is greater the Fed ends up going 50 bps in December than not going at all. The poll pins the hawkish tilt on Trump's war with Iran lifting energy costs plus tariff pass-through keeping PCE well above 2% through at least 2028.
Why it matters & what’s next are part of Pro, along with the audio summary.
Start your free 14-day trialWho’s affected
- Rate-sensitive sectors: utilities, REITs, homebuilders (NAHB sentiment already at 29, lowest since June 2012)
- Growth/AI mega-caps whose valuations are most duration-sensitive: NVDA, MSFT, AMZN
- Banks (higher-for-longer net interest margins) — JPM, BAC
- Small caps (Russell 2000) most exposed to borrowing costs
Sources