Economists see the Fed skipping October and raising rates in December

An overwhelming majority of economists, 94 of 100, expect the Federal Reserve to leave rates unchanged at its October meeting and to raise them again in December, according to a Reuters poll^2,4. The survey’s headline finding is that nearly all respondents see the central bank skipping this month before tightening again^1,3.

Fed officials have recently suggested they prefer a slower, more deliberate path for rates³. Fed Chair Kevin Warsh, who has made clear he is not keen on giving guidance, has kept mum^3,4. New York Fed President John Williams has indicated that further tightening may be necessary but sees little urgency to act immediately². He still considers one more rate hike potentially appropriate in 2026, but he has said he currently sees no pressing need to act^2,6.

Why it matters to investors

Markets were pricing a 17 per cent chance of a quarter-point hike at next week’s meeting, after traders weighed comments by Warsh⁵. That pricing sits close to the economists’ consensus, which leaves December as the meeting where the poll expects the next increase^4,5.

The wider forecasting community is moving the same way on the longer horizon. Economists surveyed by The Wall Street Journal now see higher bond yields for longer, firmer growth and eventual relief on inflation⁷. Gold declined on Tuesday as bond yields stayed elevated, even though oil dropped⁵.

Crypto markets are watching the same decision: prediction-market traders are pricing the meeting, and one market analysis argued that an October hold could ease pressure on bitcoin⁶. Across the Atlantic, Bank of England policymaker Megan Greene spoke on the same day about the risks of a pickup in broader inflation as a result of the energy price shock from the Iran war, a reminder that the tightening debate is not confined to Washington¹.

What to watch

The first test is whether Warsh keeps to his practice of offering little guidance when the October meeting ends, or uses the statement to signal December^3,4. A pause paired with no signal would leave investors relying on officials such as Williams, who has kept one more increase in 2026 on the table⁶.

The second is whether market pricing of a near-term hike, now well below even odds, moves toward the economists’ December call or away from it^2,5. Any shift in bond yields, which the Journal’s panel expects to stay higher for longer, would feed straight back into that pricing⁷.