All 101 economists in a Reuters poll expected a 25-basis-point Federal Reserve rate increase in December, before fresh U.S. inflation data matched conditions one governor cited for considering a larger move.
The Nov. 6-10 survey pointed to a federal funds target range of 4.00% to 4.25% after the Fed’s Dec. 8-9 meeting. The economists gave their forecasts before the Nov. 10 inflation release.
Seasonally adjusted core consumer prices, which exclude food and energy, rose 0.3% in October, the U.S. Bureau of Labor Statistics (BLS) said. It was the third consecutive month with a 0.3% increase. Overall consumer prices rose 0.4% in October, following a 0.6% rise in September.
Before the figures were released, Fed Governor Christopher Waller said he leaned toward a 25-basis-point increase in December even if inflation improved. He said policymakers should consider a 50-basis-point move if October core inflation was around 0.3% or higher and followed a pattern similar to the previous two months. October’s reading matched those conditions for consideration. Waller was expressing his own view, not announcing a Fed decision.
The Reuters poll found less agreement on the path after December. Fifty-six economists expected rates to peak at 4.00% to 4.25%, while 45 anticipated at least two further increases from the time of the survey.
The survey also projected inflation of 3.5% in 2026 and 2.6% in 2027 using the personal consumption expenditures measure. Its forecasts did not put inflation back at the Fed’s 2% target before 2028.
The Fed held its target range at 3.75% to 4.00% on Oct. 28, according to its policy statement, after raising rates by 25 basis points in September. The October vote was 10-2. Fed Governor Lisa D. Cook and Federal Reserve Bank of Cleveland President Beth M. Hammack favored another increase.
The next scheduled BLS price report is October producer prices, due Nov. 13 at 8:30 a.m. ET. The Fed’s Dec. 8-9 meeting is scheduled to conclude with a policy announcement at 2 p.m. ET on Dec. 9.
