Survey: Economists largely see the Fed staying on hold into October as midterms near; markets still price high odds of a hike

Huo Xing Finance reported that Bloomberg surveyed 48 economists from Sept. 4 to 9. Only 13 said they expect the Federal Reserve to raise interest rates at this month's meeting. Most respondents anticipate policymakers will keep rates unchanged at both the September and October meetings, citing a modest cooling in recent inflation and the proximity of the U.S. midterm elections. That view diverges sharply from market pricing: investors currently put the probability of a rate hike next week as high as 70%. Economists attribute the gap to elevated uncertainty over the near-term policy path under Chair Jerome Powell. Speculation about renewed tightening intensified after Powell struck a firm tone last month at the Jackson Hole central bank symposium, warning that inflation has not shown meaningful easing. The Fed's October meeting also falls just days before the U.S. midterm election on Nov. 3. Half of surveyed economists said such timing would require "exceptionally strong data" for policymakers to adjust rates immediately ahead of the vote. Still, 43% said the election is unlikely to materially affect monetary policy decisions.