CNBC Fed Survey: 86% Now Expect Rate Hikes — SkimNews
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- CNBC Fed Survey showed 86% of 29 respondents now expect at least one rate hike in the next year, up from 46% last month, with 55% forecasting two or more and a third predicting three or more
- Kevin Warsh's hawkish Jackson Hole speech, surging oil prices, and inflation that failed to cool drove the shift, with Neil Dutta (Renaissance Macro) quoting Fed Governor Waller: 'Sternly staring at inflation until it melts before our withering gaze is not an option'
- Most respondents believe the Strait of Hormuz will remain closed at least a month longer and oil prices will stay elevated for more than six months, with roughly three-quarters viewing inflation as broader than just energy
- CPI forecasts rose to near 3.5% for this year and 2.85% for 2027, yet the growth outlook barely budged — recession probability held at 29%, GDP at ~2.25%, and unemployment at 4.25%, with the S&P 500 forecast at 8,274 next year
- Warsh's credibility scored well: 59% said he shared enough on his policy views, 69% said administration pressure won't affect this month's meeting, and only 31% now say the Fed 'talks too much' versus 68% in July
- Top risks cited were continued high inflation, the Iran War, and high oil prices, while 61% flagged market risk from midterm-election legal battles and a 46% plurality expect Democrats to gain the House
Why it matters: The survey exposes a tension the Fed itself faces: respondents expect two or more rate hikes alongside 2.25% GDP growth, 4.25% unemployment, and a rising S&P 500 — conditions Guy LeBas (Janney Montgomery Scott) called 'incompatible' with the current policy rate, forcing either inflation down or yields higher.
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