A Reuters poll conducted between August 12 and 17 reveals that a large majority of economists anticipate the Federal Reserve (Fed) will keep interest rates unchanged at its upcoming September 15-16 meeting and for the remainder of the year. Specifically, 94 out of 104 economists surveyed expect the Fed to maintain its benchmark rate at 3.50%-3.75% in September, a result consistent with the previous month's survey. Furthermore, nearly 80% of respondents, or 80 economists, forecast no change in interest rates through the end of 2023 [1].
The poll's median forecasts suggest that the current rate levels will persist through the end of 2027, indicating a prolonged period of steady monetary policy. Regarding inflation, economists expect Personal Consumption Expenditures (PCE) inflation to average 3.5% this year, unchanged from last month's forecast. The poll also indicates that inflation is expected to remain above the Fed's 2% target until at least 2028 [1].
The article explains that the Fed's dual mandate is to achieve price stability and foster full employment, primarily through adjusting interest rates. When inflation exceeds the 2% target, the Fed typically raises rates, which can strengthen the US Dollar. Conversely, if inflation falls below target or unemployment rises, the Fed may lower rates to stimulate borrowing, which can weaken the Dollar [1].
No immediate market reaction or analyst opinions beyond the poll results are discussed in the article. The focus remains on the consensus among economists for a steady rate environment and persistent inflation above target levels [1].
CONCLUSION
The Reuters poll underscores a strong consensus among economists that the Federal Reserve will keep interest rates unchanged through at least 2027, with inflation expected to remain above target for several years. This outlook suggests a stable monetary policy environment, with limited immediate market impact anticipated.