All 100 Economists Expect a December Fed Hike as Inflation Stays Stubborn

A Reuters survey found all 100 economists surveyed expect the Federal Reserve to raise rates again in December, a sharp shift from the prior month, when fewer than half expected a December increase. For the October 27-28 meeting, 94 economists forecast the Fed will keep the federal funds rate at 3.75%-4.00%. The FOMC had unanimously raised rates by 25 basis points in September. Nearly 60% of respondents expect the policy rate to peak at 4.00%-4.25%, while 38 of 92 economists answering a separate question expect at least two additional rate hikes. The PCE price index is forecast to remain more than 100 basis points above the Fed’s 2% target for several quarters and may not return to target until 2028. US GDP grew at a 2.2% annualized rate in the second quarter, with economists forecasting 3.2% growth for the third quarter and 2.2% growth in October-December. AI infrastructure investment and resilient consumer spending were cited as growth supports. Oil prices remain above $100 per barrel, while new import tariffs are adding cost pressure.