IA Readers and the Fed's Rate Pause

When the IA Poll for August appeared on August 1, asking advisors “When do you believe the Federal Reserve will stop hiking rates?” there had been talk for some time to the effect that the Fed might be ready to pause in its rate hikes. The only question was when the pause might occur. Some will say they were not surprised when the Fed did, in fact, pause on August 8th, leaving the Fed Funds rate at 5.25%. The question remains: is this a pause or is the Fed really finished boosting rates for this market cycle? We won’t know the answer to that until the next meeting of the Federal Open Market Committee on September 20.

The majority of IA readers who took the Poll, 61%, said that the Fed would stop raising in the third quarter of 2005, while 6% said it wouldn’t happen until the fourth quarter. Some advisors, 17%, said that it would not be until the first quarter of 2007, and 11% said it would be the second quarter of 2007. “Other” was selected by 6% of those who took the Poll, but they did not specify a date.