Why One Top Economist Says the Fed’s Inflation Fight Can’t Be Won With Rate Hikes
Wells Fargo chief economist Tom Porcelli is pushing back against market bets on a Federal Reserve (Fed) rate hike, saying he expects the central bank to hold rates through 2026.
His view clashes with a hawkish turn across Wall Street, where several major banks now forecast higher rates. Traders have also sharply lifted their expectations for rate hikes since early summer.
Wall Street Economist Breaks From Market on Rising Fed Hike Bets
The Fed has held its benchmark rate at 3.50% to 3.75% all year. Yet, pricing for tighter policy has climbed.
On Polymarket, the odds of a 2026 hike sit near 55%. They peaked around 78% in late July before easing this month.
CME FedWatch data tell a similar story. A hold leads the September 16 meeting at 55.6%. However, the odds of a hike rise to 59.2% for October and 77.1% by December.
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The Street has turned hawkish, too. Bank of America (BofA) forecasts three hikes totalling 75 basis points. In addition, Pacific Investment Management Company (PIMCO) has warned that cuts would prove counterproductive.
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