TD Securities Drops Fed Hold Forecast: Up to Three Rate Hikes Expected Starting September

Odaily News — TD Securities strategists said on Friday that they expect the Federal Reserve to begin the first of three rate hikes in this cycle in September, after previously forecasting that the central bank would hold rates steady for the remainder of 2026.

"We expect a total of three rate hikes in this cycle, with the latter two increases coming in October and January of next year," strategists including Oscar Munoz and Gennadiy Goldberg wrote in a research note published on Friday. "The Fed may not provide forward guidance, but the dot plot should lean hawkish." The revised expectation came after U.S. August CPI released on Friday came in above expectations. The data prompted traders to raise their bets on near-term Fed rate hikes. "After the August CPI showed a lack of progress on inflation, we expect the Fed to begin its rate hike cycle in September," the strategists wrote in the report.