25 basis points is the unanimous call for December Fed hike – Reuters poll
All 101 economists in a Reuters poll conducted November 6-10 expect the Federal Reserve (Fed) to raise interest rates by 25 basis points on December 9, taking the target range to 4.00%-4.25%.
The split is over what happens next. A slim majority, 56 of 101, expects December to mark the final hike of the current cycle. The other 45, including more than half of the primary dealers surveyed, expect at least two more increases after December.
Separately, 29 of 37 economists said the midterm elections didn’t change how they see inflation risks over the medium term.
Fed Governor Christopher Waller said on Tuesday he would “still support a 25 basis point increase” in December even if October inflation cools. He added that “a stronger policy move may be needed” if monthly core CPI comes in at around 0.3% or higher, saying the Fed should consider a half-point hike in that case.
The median forecasts in the poll showed that inflation, as measured by the Personal Consumption Expenditures (PCE) Price Index, was expected to remain above 3% over the coming quarters and return to the Fed’s 2% target in 2028 at the earliest. PCE inflation was forecast to average 3.5% in 2026 and 2.6% in 2027, both slightly above last month’s estimates.
The poll put fourth-quarter US growth at an annualized 2.2%, down from 3.4% in the third quarter. Economists raised their full-year growth forecasts slightly to 2.4% for 2026 and 2.2% for 2027.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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