A new survey signals the Fed's next move may be bigger than markets expected
A majority of Wall Street forecasters now expect the Federal Reserve to raise interest rates at least twice over the next year, a reversal from just a month ago, as the central bank's September meeting gets under way with inflation running well above target and oil prices still elevated.
The latest CNBC Fed Survey found that 86% of respondents now anticipate at least one rate hike ahead, with 55% forecasting more than a single move, up from just 46% expecting any tightening at all last month.
One-third of the survey's 29 respondents, a group spanning economists, fund managers, and strategists, are now calling for three or more hikes over the next 12 months.
Inflation spreading beyond energy
Fed Chairman Kevin Warsh's address at last month's Kansas City Fed symposium in Jackson Hole, Wyoming was a decisive turning point in market expectations, with hike probabilities roughly doubling in the days that followed his keynote remarks.
On inflation, his tone was unambiguous. "While this summer's readings were better than expected, they do not tell me that underlying trends have meaningfully improved," Warsh said. "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do."
The personal consumption expenditures price index rose 3.7% in the 12 months through June, while core prices rose 3.3%, with inflation described by Fed Governor Lisa Cook as too high to ignore.
The average CNBC survey CPI forecast has since climbed to roughly 3.5% for 2026, easing to approximately 2.85% in 2027.
What concerns forecasters is the breadth of the problem: roughly 75% of survey respondents now believe inflation has spread beyond energy prices into broader goods and services, making a self-correction unlikely without Fed intervention.
August core CPI rose 0.3%, above economists' forecasts, while market-implied odds of a September rate increase moved sharply higher following the release. The data arrives just days before the Fed's September 15-16 policy meeting.https://t.co/KcxUSSuf36
— Mortgage Professional America Magazine (@MPAMagazineUS) September 11, 2026
What it means for mortgage professionals
For loan officers already contending with a market where four straight weeks of rate increases sent the 30-year mortgage to a year-high, the survey reinforces an increasingly difficult origination environment.
The 30-year fixed has been running above 6.5% through much of the summer as Treasury yields climbed sharply in the weeks following Jackson Hole.
Bill Dallas (pictured top), chairman of Dallas Capital, has spent more than 40 years in the mortgage industry, including building companies through the last non-agency boom in the 1990s and 2000s. He said the mistake he sees most often among clients is treating this cycle as temporary.
"Look, you've been in this mess for a while, and the low-rate cavalry, you kept praying that these guys are going to show up," Dallas told Mortgage Professional America.
"I've tried to tell my clients that that's not going to happen. They want to think about it as episodic. What I'm trying to get them to think about is, guys, this is structural."
Despite the hawkish shift in rate forecasts, the broader growth picture has remained largely stable. Survey respondents put the probability of a recession at an average of 29% over the next 12 months, modestly above normal, with gross domestic product growth projected at approximately 2.25% this year and next.
The Fed announces its rate decision Wednesday at the close of its two-day September meeting.
Stay tuned tomorrow for all our coverage of the Federal Reserve’s much-anticipated decision – and make sure to subscribe to receive all the biggest mortgage news of the day here.
