December Hike Unanimous in Reuters Poll (100/100) as Economists Say Skip October — "Treading Water" Criticism, Peak Seen at 4.00–4.25%, PCE Not Back at 2% Until 2028
Update (Oct 20, Reuters economist poll): The consensus consolidated around skip-October/hike-December — unanimously. In the Reuters poll of 100 economists (Oct 16–20), 94 expect the Fed to hold at 3.75%–4.00% on Oct 27–28, and all 100 expect a hike in December1 — "a sharp reversal from less than half saying so in last month's poll." Market pricing agrees: October is essentially off the table (CME FedWatch showed ~8-in-10 hold odds by Oct 19, with futures at just 15% October-hike probability on Friday Oct 17 — down from the ~50/50 right after the hot Sept 14 CPI in September CPI: Headline Jumps to 3.7% y/y on a 9.1% Gasoline Spike — Core Picks Up to 2.6% as Pressure Broadens Past Energy, and Real Wages Fall for a Second Straight Month), while the December 15 FOMC remains a near-certain hike (~92% priced as of the Oct 17–19 weekend repricing).
The poll's tail is the story: 38 of 92 economists (41%) now see at least two further hikes — up from one-fifth in the September survey — while nearly 60% see the peak at 4.00%–4.25% (one more 25bp move). Poll medians show PCE inflation staying more than 100bp above 2% through coming quarters and not returning to target until at least 2028. Growth stays above the Fed's non-inflationary pace: Q3 seen at 3.2% annualized, 2.3% for 2026 and 2.1% for 2027.
The hawks' complaint is that holding in October is itself the policy error. Mizuho's Alex Pelle: "You have a strong economy and you have inflation. There's really no reason for you to worry so much about getting interest rates higher, this is like the easiest choice… Unfortunately, the Fed is really not getting more on top of the issue, they're just treading water and perhaps even getting a little behind." And on December: "They'll go 25 in December, but the risk is greater they end up going 50 than they don't go at all." Morgan Stanley's Michael Gapen: "The risks are in the direction of a Fed that ultimately needs to hike rates more than we expect… If there are risks around the path for the economy and inflation, they do appear tilted to the upside."
Two structural points worth keeping from the poll: (1) the resilience is narrow — UBS's Abigail Watt: "A lot of the resilience we've got in the economy is coming through the AI tech buildout… probably more narrowly driven by upper-income groups who are benefiting from this kind of AI spillover through the equity market" (see Warsh Names the AI Buildout's "Very Bumpy" Road from Bangkok — and the Beige Book Finds Firms Already Cutting Headcount After AI Productivity Investments); (2) the politics are unavoidable — the Oct 27–28 meeting lands days before the Nov 3 midterms, with a Reuters/Ipsos poll finding a bipartisan majority blames Trump policies for the rising cost of living, and White House officials having suggested an October hike "might not be wise."
What it means: the December 15 hike is now base case across economists AND markets; the live question has shifted from "hike or hold" to whether the peak is 4.25% or higher — and whether Warsh's no-guidance regime keeps a 50bp December move credibly on the table. Next inputs: September core PCE (~Oct 30, tracking ~3.1%) and October CPI (Nov 10) — both already under watch.
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An instance of A labor market that will not bend hands monetary policy entirely to inflation. — With claims frozen at historic lows and PCE not seen back at 2% until 2028, employment offers the Fed no cover, so the entire rate path is handed to inflation — unanimously. ↩︎