MBA, Oxford Economics back December Fed hike after October jobs data
Oxford Economics: AI and energy hold the wildcard
Matthew Martin, Senior US Economist at Oxford Economics in New York, agreed on the December direction but identified conditions that could soften the 2027 outlook.
“Wage growth ticked higher in October, but with annual gains still running around 3%-3.5% and productivity growth north of 2%, the labor market is still not a source of upward pressure on inflation,” Martin said.
“AI and energy spillovers are the main risks, which is why the Fed will be attentive to recent moves in financial markets.”
Martin noted that sustained declines in tech stocks and oil prices could eliminate the case for a further hike in early 2027, an outcome that would offer some relief to brokers navigating rates near 7% since September’s first hike since 2023.
For now, the December call remains firm, consistent with J.P. Morgan’s earlier projections of further tightening throughout the cycle.
