Two-Thirds of Economists See High Probability of Fed Rate Hike in 2026, Reversing June Outlook

According to a Reuters survey conducted from July 17–21, about 66% of economists believe the probability of the Federal Reserve raising interest rates in 2026 is high, marking a sharp reversal from June when most expected rate hikes to be unlikely. The shift comes as oil prices have surged nearly 25% amid escalating Middle East tensions, raising concerns that last month's disinflation may prove temporary. Inflation currently remains roughly double the Fed's 2% target. However, when asked about baseline expectations, over three-quarters of surveyed economists still predict the Fed will hold rates steady through the end of 2026, with the central bank expected to maintain the federal funds rate at 3.50%–3.75% at its July 28–29 meeting.
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