Economists Split on Whether December Will Be the Fed's Last Rate Hike

A new survey of 101 economists finds the Federal Reserve’s rate path remains uncertain: 56 expect a December increase to end tightening, while 45 see at least two more hikes.

The 56 economists represent about 55% of respondents, a share little changed from the prior month. More than half of the surveyed primary dealers expect at least two additional increases, consistent with market pricing. Economists expecting further hikes said risks to the inflation outlook had not changed since the U.S. midterm elections and that political shifts were unlikely to ease price pressures quickly.

Crude oil futures have fallen more than 22% from late-October highs as markets hope for a resolution to a Middle East conflict nearing nine months. A strong labor market, resilient economic growth and inflation above the Fed’s 2% target for nearly six years point to continued pressure for tighter policy.

Wells Fargo Chief Economist Tom Porcelli said upcoming inflation readings would guide the Fed’s decision and argued policymakers had ample reason to raise rates at their October meeting. The next expected rate increase is in December, but the survey shows no agreement on whether further hikes would follow.