Most Economists Expect Fed To Hold Rates Through Year-End
By CU Today Staff —
WASHINGTON—The Federal Reserve is expected to hold interest rates steady at its Sept. 15-16 meeting and through the remainder of 2026, according to a Reuters poll of economists, although expectations for a rate increase have risen substantially during the past month.
"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. They're likely to start a hiking cycle," Eli Nir, U.S. economist at TD Securities, told Reuters.
August's Consumer Price Index, scheduled for release Friday, is expected to show prices increased 0.4% from July, according to a separate Reuters poll, while annual inflation is forecast to remain at 3.4%.
Reuters noted the Federal Open Market Committee was sharply divided at its July meeting, when three members favored a rate increase, while Fed Chairman Kevin Warsh's Jackson Hole speech was widely viewed as hawkish. Markets have priced in two rate increases by March amid persistent inflation and a renewed rise in oil prices.
"In my view, Chairman Warsh coming out firmly in the camp of the hawks at Jackson Hole means that a hike is probable this month unless Friday's CPI release brings a substantial downside surprise," Stephen Stanley, chief U.S. economist at Santander, told Reuters.
Originally reported by CU Today.