The Federal Reserve is widely expected to hold interest rates steady in its upcoming meeting this week, with 93% of respondents in CNBC’s latest Fed Survey predicting a pause. However, the majority anticipate the central bank will raise rates at its December gathering, and over half forecast about two rate hikes next year. Experts voiced concerns about persistent inflation and strong nominal GDP growth, suggesting the Fed should be more aggressive in tightening monetary policy to curb inflation.

While 40% of survey participants believe the Fed needs to slow economic growth below its potential to address inflation, others feel the economy requires only moderate cooling or none at all. Inflation is perceived as a broader issue than just energy costs, despite expectations for oil prices to fall from current levels above $100 per barrel to around $88 in six months. Some economists caution against premature rate hikes, citing a weakening economy and uncertainties including geopolitical risks like the Iran war.

Economic growth projections remain optimistic, with GDP expected to grow 2.4% this year and slightly above potential at 2.2% in 2027. The predicted risk of recession in the next year has decreased to 26%, while unemployment is forecast to remain stable at 4.2% through the end of the year before rising modestly next year. Inflation is expected to moderate gradually, with the Consumer Price Index projected to decline to 2.6% by 2027 from current readings near 3.7%.

Respondents also highlighted high government debt and rising bond yields as key concerns, expecting 10-year Treasury yields to stay above 5% this year. Market uncertainty related to the upcoming congressional elections is seen as a significant short-term risk, with 63% of respondents noting potential volatility from election outcomes. While most do not foresee major changes in tax policies regardless of which party controls Congress, 41% anticipate higher deficits, reflecting broader fiscal challenges ahead.