One-Third of Investors Favor Holding Interest Rates Steady

This week’s Sentiment Survey special question asked AAII members what they thought about the likelihood of interest rates being held steady for at least the remainder of the year. Slightly more than a third of all respondents (34%) think holding rates steady is a good idea. An additional 24% view the odds of another rate hike occurring this year as being unlikely. Many respondents in both groups cite signs of a slowing economy and uncertain trade headlines. Nearly 12% believe a rate cut is a more likely occurrence than a rate hike. About 14% think another rate hike occurring later this year is still a possibility.

Here is a sampling of the responses:

• “In my opinion, the Federal Reserve believes the economy has reached a balance between inflation and recession-type pressures.”
• “I believe interest rates will remain steady because the global economy is slowing.”
• “A cut is more likely than an increase with the global slowdown ultimately affecting the U.S.”
• “It is very likely that the interest rates won’t be raised, although with the Fed being data-driven, that could change.”
• “I look for them to move rates up in September or October.”

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