Chances the U.S. Federal Reserve will raise interest rates in December have shot up in the past month, according to a Reuters poll that showed economists are more convinced a move is on its way despite weak inflation and wage growth.
Several Fed officials have recently suggested the economy is nearly ready for higher rates, raising expectations for a September hike, but Fed Governor Lael Brainard surprised many with a cautious approach in a speech earlier this week.
Still, the consensus view from over 100 economists polled by Reuters in the past week showed the fed funds target rate will rise to 0.50-0.75 percent in the fourth quarter, with a median 70 percent probability of a December move.
In last month’s poll the probability was 57.5 percent. Markets are pricing the chances at under 40 percent.
That would mark a year since the Fed last raised rates and underscores the trouble it has had in hiking even once, against initial estimates it made in December of four increases this year.
via Reuters
