Interest Rate Hikes in Election Years: Likely or Not?

According to Alec Phillips, an economist at Goldman Sachs, if the Fed were to initiate an interest rate hike, it would come as a surprise as they’ve traditionally refrained from doing so during election years.

In his research, Phillips said that there’s more chance for the Fed to cut rates than raise them in general, and the pattern is stronger during years when there’s a presidential election.

Goldman Sachs places the odds of a December rate increase at 30%, whereas if they remain unchanged in September, then a November increase is “quite unlikely” because of how close the meeting is to the November 8 election.

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