Bloomberg Surveillance · Wednesday, September 9, 2026
Seema Shah believes the Federal Reserve's decision on interest rates is on a 'knife's edge,' with upcoming inflation data being crucial. Her team forecasts core CPI near 0.02%, which should allow the Fed to remain on the sidelines. However, if the print is higher, a hike becomes likely. Shah personally believes the Fed should wait longer to assess consumer reaction to oil prices and the impact on inflation, but acknowledges the Fed's credibility concerns could push them towards a hike.
“You know, I have to be honest. We go back and forth on this. I certainly go back and forth on this. So this is really on a knife's edge.”
“Now, at the moment, our team is forecasting that inflation out on Friday is going to be showing a core CPI close to the 0.02%. And that should be enough to keep the Fed standing on the sidelines. Now, of course, if it's higher than that, then absolutely, I do think the Fed is likely to hike.”
“I do think that they should be standing by for a little bit longer, wait to see how consumers deal with oil prices. Are they actually slowing or are they staying very, very robust? I think there's a lot of question marks out there.”
“I also think that the credibility issue is becoming a bigger one for the Fed. And that in itself raises the odds of a hike next week so that if you were to see an inflation print, which is closer to the 0.0234, whatever percent it is, that it means that the Fed is more likely to hike because it's worried that the market is going to say, look, you don't really have that inflation fighting credibility anymore.”