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Will the Fed Raise Rates? Economists Are Split Down the Middle


As hectic global markets continue to run wild, one question lingers: Will the Fed raise interest rates this month? According to a survey of 54 economists, those polled are nearly split down the middle, as 48% expect a jump this month, which would be the first since 2006. While Fed Vice Chairman Stanley Fischer (pictured) is confident inflation will rise, some economists, such as Goldman Sachs chief economist Jan Hatzius, believe that raised rates can startle jumpy markets and slow recovery in the wake of the Dow’s record fall last week. Economists don't see a bubble bursting anytime soon—at least not in commercial real estate—meaning there won't be any steep cost if the Fed decides to delay until December. But those who predict a September rate jump believe the US economy is strong enough to correct itself, even with a sluggish China market. Most agreed, however, that inflation will remain below the Fed’s 2% target. Any rate hike solely depends on the market’s stability and unemployment rates going forward, Moody’s Analytics chief economist Mark Zandi says. [Bloomberg]