About 55% of economists surveyed (56 of 101) expect a December rate hike to mark
the end of the current tightening cycle, roughly unchanged from last month. The
other 45 respondents expect at least two more Fed hikes, including a majority of
primary dealers — a view consistent with market pricing; they said inflation
risks have not changed since the US midterms. Political shifts are unlikely to
quickly ease inflation pressures. Although markets hope a nearly nine-month
Middle East conflict will resolve and oil futures have fallen over 22% from
late-October highs, inflationary pressure persists. A strong labor market,
resilient growth and inflation running above the Fed’s 2% target for nearly six
years argue that further tightening may be necessary. Wells Fargo chief
Economist Tom Porcelli said: "The Fed's decision depends on upcoming inflation
data, which will prompt it to hike again. In fact, the Fed had full
justification to raise rates at the October meeting."
