The survey was taken on Nov. 4 and 5, prior to the U.S. Senate compromise which seems to have at least temporarily ended the budget standoff.

Panelists had already expected U.S. economic growth would moderate in the fourth quarter, following the 2.7% expansion for the period ended Sept. 30. But the shutdown added an additional dose of pessimism to their views.

A special question to the survey found 71% agreed the shutdown could create a measurable slowdown on economic growth, while 29% dissented.

What factors shaped economists views in November

This, as well as post-meeting statements from Fed Chair Jerome Powell, likely contributed to 69% of respondents expecting the next rate cut (likely another 25 basis point reduction) to take place at the December meeting. 

However, Fed Governor Stephen MIran is pushing for a minimum of a 25 basis point cut at the next meeting.

But 13% are stating they believe the next FOMC action will be in January, another 13% cited March while 5% think it would be even later.

The agreement to end the shutdown, which is expected to be approved by the House of Representatives on Wednesday, "will bring a deluge of economic data, giving more insight into what to expect from the Fed in December," said investment banker Louis Navellier in a Nov. 11 market commentary. .

"Bets on a series of Fed cuts are higher today, but still well below where they were before Powell cautioned that a December cut was far from certain after the October quarter-point cut," he continued.

On Wednesday, Navellier updated his commentary to note that some Fed pundits are now forecasting a 50 basis point reduction in December.

"If that happens, it may initially bring fears about the Fed seeing a recession in the cards, but it will be supportive of high P/Es [price to earnings ratios] and lead to fund flows out of money market accounts," Navellier wrote.

What economists are looking for in 2026

The division among FOMC members during the October meeting removed much of the cuts the financial markets previously expected during 2026, Wolters Kluwer said.

For 2026, the BCEI economists' consensus is for 60 basis points of total cuts, either two or three at 25 basis points each, the report said.

When it comes to inflation, the BCEI panelists expect tariff-related pressure on consumer prices to continue, with the worst in the current quarter. They expect the core Personal Consumption Expenditures index to increase 3.3%, which is a little slower than the 3.5% prediction in the last survey.

"Thereafter, the pace decelerates through 2026, with core inflation retreating to 2.3% in the fourth quarter of next year," the BCEI report said.

Expectations about where rates will be by this time next year among panelists were "considerably more dispersed.

"This divergence is understandable given the current backdrop," the report commentary said. "In the near term, uncertainty stems from the ongoing U.S. government shutdown and fluid tariff environment, while over the medium term, the potential implications of the 2026 midterm elections also come into play."