Rate hike adds more suspense? Bloomberg survey shows most economists expect the Fed will not raise rates within the year.

BlockBeats news, September 11 - Bloomberg conducted a latest survey of 48 economists from September 4 to 9. The results showed that only 13 respondents expect the Federal Reserve to take a rate hike action at this month's meeting. The vast majority of economists judged that, due to the recent marginal slowdown in inflation and the approaching U.S. midterm elections, policymakers will choose to stay put for consecutive meetings in September and October.

However, this institutional consensus leaning toward "patience" stands in extremely sharp contrast to market pricing. Financial market investors currently predict the probability of a rate hike next week at as high as 70%.

This severe divergence in expectations largely reflects the extreme uncertainty surrounding the short-term direction of monetary policy under the leadership of Federal Reserve Chairman Warsh. The resurgence of rate hike bets stems directly from the hawkish signal Warsh released last month at the Jackson Hole central bank annual symposium in Wyoming, when he warned that inflation had not shown meaningful slowing.

In addition, the Federal Reserve's October policy meeting is only a few short days away from the U.S. midterm elections on November 3. Regarding this special timing, half of the surveyed economists pointed out that the extreme proximity of the meeting to the election means policymakers will need "particularly strong data" to dare to adjust interest rates on the eve of the election. Nevertheless, 43% of respondents still believed the election would not have a substantive impact on monetary policy decisions.