The Fed will hike rates at least twice in the next year. This according to a CNBC survey of people whose job depends on pretending they know what the Fed will do next year.
Higher oil prices changed their view. Which makes sense. The Fed famously sets interest rates based on what a bunch of newsletter writers think about crude futures. It's in the charter. Look it up.
Three-quarters of respondents see inflation as broader than just energy prices. The other quarter presumably see inflation as a hoax perpetrated by grocery stores to make them look stupid at checkout. Both groups get paid to fill out surveys.
The survey does not mention what these same respondents predicted last year. Or the year before that. Convenient.
Retail traders will read this headline and immediately restructure their portfolios around the certainty of two rate hikes. They will buy inverse ETFs. They will short regional banks. They will explain their thesis in Discord channels at 2am using the word "obviously" six times per paragraph.
The Fed will then hike zero times. Or four times. Or they'll cut rates and announce a new program called Definitely Not QE We Promise This Time. The survey respondents will issue new surveys explaining why they were technically correct if you think about it from a certain angle.
None of this matters. Rate hikes get priced in before they happen, then repriced when they don't happen, then priced in again when something else happens. The market moves on technicals and liquidity and whether or not someone's algorithm had a bad day.
But sure. Two hikes. Write it down. Frame it. Build your retirement around the prognostication skills of people who get paid whether they're right or wrong.
The survey respondents have already moved on to predicting what the Fed will do in 2028, and they're feeling really good about those guesses too.
Photo by Nick Fewings on Unsplash
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