Markets vs. Economists: Who's Right on Fed Interest-Rate Timing?
- Fed funds futures indicate 2016 liftoff, economists see Dec.
- Officials speaking Monday mostly expected liftoff this year
Is It a Mistake for the Fed to Raise Rates?
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Will the Federal Reserve raise interest rates by the end of the year? You get a very different answer depending on the source.
Eighty-four percent of economists surveyed by Bloomberg expect an initial interest-rate increase in December, according to a survey conducted Sept. 25-28. That contrasts with the signal federal funds futures are sending: Pricing suggests that investors see a roughly 40 percent probability of a rate rise by year end, based on an assumption that the effective funds rate will trade at the 0.375 percent mid-point of the target range following Fed liftoff.