Reuters survey: Economists predict Fed to pause rate hikes in October and raise rates in December

According to a Reuters survey, 94 out of 100 surveyed economists expect the Federal Reserve to maintain the federal funds rate in the range of 3.75% to 4.00% in October, and all 100 respondents expect a rate hike in December. Alex Pelle, Senior US Economist at Mizuho Bank, stated that the Federal Reserve's decision not to raise interest rates in October was a mistake. The Fed will raise interest rates by 25 basis points in December, but is more likely to raise rates by 50 basis points. (Source: Reuters) AI interpretation: The market has formed a highly consistent expectation of tightening for the Federal Reserve's monetary policy path. Economists generally believe that maintaining interest rates unchanged in the short term is a transitional strategy, and restarting interest rate hikes before the end of the year is an inevitable choice to cope with inflationary pressures. The adjustment of this policy pace directly pushed up the market's pricing for a longer sustained high interest rate environment. The Federal Reserve is guiding the market to correct its excessive illusions about loose policies through clear expectations of interest rate hikes while balancing economic growth and price stability.