Two-Thirds of Investors Agree With Federal Reserve’s Pausing of Interest Rate Hikes

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This week’s Sentiment Survey special question asked AAII members for their thoughts on the prospect of the Federal Reserve pausing its cycle of raising interest rates. Nearly two-thirds of the respondents (65%) agree with the neutral stance. Many of these respondents pointed to the lack of inflationary pressures, approve of chairman Jerome Powell’s talk of being data dependent or noted current uncertainties over trade. Others said that while they agree with the current pause, further rate hikes are still warranted. Slightly more than 18% express concern, viewing the Fed as being influenced by the stock market and/or President Trump or otherwise believing rates need to be raised further. About 6% say they are comfortable with monetary policy so long as it is based on the economic data.

Here is a sampling of the responses:

  • “It is an excellent idea since there is no sign of inflation heating up.”
  • “I wish rates were higher, but their data-dependent approach is better for now.”
  • “I think they are nervous about the political tongue lashing, even though they say otherwise.”
  • “Some raising may be necessary if only to provide flexibility to maneuver when the next financial crisis occurs.”
  • “I think they are pausing for certain things to play out and to get more data.”

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