The Federal Reserve is now expected to raise interest rates by a quarter percentage point at its meeting this week, according to a Reuters poll of economists published Monday that marks a sharp reversal from last week's consensus. Eighty-six of 101 economists surveyed after Friday's inflation report, an 85% majority, said the Fed would raise its benchmark rate to 3.75%-4.00% at the September 15-16 meeting, which would be the first increase since July 2023; last week's survey showed more than two-thirds of respondents expecting no change, and fed funds futures markets now assign roughly a 90% probability to a hike. The shift followed hotter-than-expected inflation data, with August's consumer price index up 0.4% on a seasonally adjusted basis and the year-over-year figure at 3.4%, while core CPI climbed 0.3% for the month, 0.1 percentage point above analyst expectations. Goldman Sachs, JPMorgan, HSBC, and Deutsche Bank had already reversed their positions and moved to forecasting a hike this week, and looking beyond this week, a near-majority of economists now expect at least one further rate increase by the end of March.
Deutsche Bank Aktiengesellschaft
Goldman Sachs Group Inc
HSBC Holdings PLC
JPMorgan Chase & Co