Economists Project Federal Reserve Rate Increases

Borrowers should prepare for potential changes to interest rates following the Federal Reserve's scheduled December meeting.

Updated on Oct. 21, 2026 in Economic Indicators

Bold flat-color editorial illustration of a heavy brass weight on a marble pedestal, representing interest rate policy gravitas. — Economists unanimously project that the Federal Reserve will raise interest rates at its December meeting to address persistent inflation concerns. AI Illustration. Upload story photo >

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Economists in a recent survey unanimously expect the Federal Reserve to raise interest rates at its December meeting. This outlook follows a period of persistent inflation and ongoing debates about the drivers of current economic policy.

Why it matters

Understanding the trajectory of benchmark interest rates is essential for households, as these decisions directly influence the cost of borrowing for mortgages and consumer credit. The Federal Open Market Committee adjusts these rates based on its ongoing assessment of economic growth, price stability, and labor market conditions.

A survey of 100 economists shows unanimous expectations for a rate hike in December, following an average 30-year fixed mortgage rate of 7.40 per cent as of mid-October 2026. This comes as August inflation reached 3.4 per cent year on year.

The players

Federal Open Market Committee

The arm of the Federal Reserve responsible for setting national interest rate policy to influence inflation and economic growth.

Donald Trump

The current President of the United States who has previously commented on the relationship between stock market performance and interest rate policy.

The details

The Federal Open Market Committee sets the federal funds rate as a tool to manage economic stability, specifically balancing maximum employment and stable prices. Mortgage lenders and credit issuers adjust their own consumer rates based on bond-market conditions and inflation expectations, which react to these benchmark shifts. When the Committee opts to raise rates, the borrowing cost for households generally increases as these higher rates filter through the financial system.

August 2026: Headline PCE inflation reached 3.4 per cent.
September 16, 2026: The Federal Open Market Committee raised interest rates.
October 20, 2026: Reuters concluded its poll of 100 economists.
December 8-9, 2026: The Federal Reserve is scheduled to meet.

Money Landscape

The anticipated interest rate movements reflect the Federal Open Market Committee's dual mandate to balance stable prices and economic growth. This current policy cycle occurs as the economy maintains a 2.2 per cent annualised growth rate from the second quarter of 2026.

Households considering major purchases or refinancing should monitor upcoming Federal Reserve meetings, as these rate shifts influence the affordability of credit and mortgage products. Consult with a qualified financial professional to assess how potential changes in borrowing costs affect your budget.

The takeaway

Economic forecasts point toward potential interest rate increases to address ongoing inflation concerns as the year closes. Keep a close watch on the December 8 to 9, 2026, meeting outcomes, as these decisions often serve as a signal for the cost of borrowing in the coming months.