CNBC Fed Survey: 92% Expect December Rate Cut Amidst Inflation and Tariff Concerns

Federal Reserve Survey Results

• 🎯 92% of respondents anticipate the Federal Reserve will implement a 25 basis point rate cut at the upcoming December meeting.
• 💡 Despite worries about inflation, tariffs, and a government shutdown, a majority (66%) believe the Fed should cut rates.
• ⚠️ Concerns about inflation persist, with expectations that it will remain above the Fed's 2% target through 2027.

Impact of Tariffs and Inflation

• 📈 Tariffs are identified as the number one threat to economic expansion, though many respondents feel their inflationary impact has been less than expected so far.
• 💸 A significant portion of respondents (48%) believe the full effects of tariffs have not yet been passed on, suggesting potential future price increases.
• 📉 Conversely, 30% believe companies are absorbing tariff costs, and 13% note offsets from declines in other CPI categories.

Future Rate Cut Expectations

• 🗓️ Survey respondents and some Fed officials express concern about cutting rates too aggressively while inflation remains elevated.
• 📉 Projections suggest additional rate cuts totaling 100 basis points, potentially bringing the funds rate down to 3.2% by 2026.
• 🧐 Several Fed officials share concerns about cutting rates without sufficient data to confirm the necessity and impact of such actions.