U.S. central bankers face their toughest policy call in years in September -- raise interest rates or wait a little longer. Whatever the decision, about half of economists will be wrong.
Forty-eight percent of 54 economists surveyed Aug. 27-31 by Bloomberg News see a September increase in the benchmark lending rate, the first move up since 2006. That’s down from 77% who expected a September rate increase when Bloomberg surveyed them Aug. 7-12, though it is double the 24% who expect the first move in December. Seventeen percent said October.
“The odds of a September rate increase are below 50% but not by much,” said Roberto Perli, a partner at Cornerstone Macro LLC in Washington and a former Fed board economist. At the same time, the Fed won’t pay a high price if it decides to delay. “There isn’t anything that screams inflation or that screams financial bubble ready to explode tomorrow morning,” he said.
The policy-setting Federal Open Market Committee next meets Sept. 16-17, giving officials time to digest the August employment report due Sept. 4.
(more economists' predictions of a Fed rate hike . . . )
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