No one and done: The Fed will hike at least two times over the next year, according to CNBC survey

CNBC Fed Survey respondents now see at least two hikes over the next one year, a big change from just one month ago. While higher oil is cited as a main reason for the change in view, roughly three quarters of respondents see the inflation problem as broader than just energy prices. The average CPI forecast rose to near 3.5% for this year and 2.85% for 2027.

It's not going to be one and done. A majority of respondents to the CNBC Fed Survey now forecast at least two hikes over the next one year, with a third predicting three or more. It's a stark change from last month when just 46% expected a hike ahead. That's grown to 86% with 55% expecting more than a single hike.

Since last month, Fed Chairman Kevin Warsh delivered a hawkish speech in Jackson Hole, oil prices surged, inflation failed to cool and respondents now seem to believe inflation has spread beyond energy and won't take care of itself without action by the Fed.

Most of the 29 respondents, including economists, fund managers and strategists, believe the Strait of Hormuz will remain closed at least a month longer and that oil prices will remain elevated for longer than six months.

"The renewed march higher in oil, gasoline, and diesel prices adds to concerns higher energy prices could spill over to other goods and services and inflation expectations," wrote Kathy Bostjancic, chief U.S. economist at Nationwide.

There's already concern that that's happening. Roughly three quarters of respondents see the inflation problem as broader than just energy prices. CPI forecasts rose for both 2026 and 2027, with the average forecast rising to near 3.5% for this year and then settling in at 2.85% in 2027.

Several respondents, however, were skeptical of the Fed's ability to lower fuel-driven inflation with rate hikes. "The FOMC faces a challenge in showing institutional credibility vis-a-vis the inflation piece of its mandate relative to its limited ability to impact supply-driven inflation using its rate setting tool," said Douglas Gordon, senior portfolio manager at Russell Investments.

The Fed will decide on rates Wednesday at the conclusion of its two-day meeting. The last FOMC meeting was in July.

Despite a shift to forecasts for multiple Fed rate hikes, the growth outlook has not changed much. Recession concerns remain unchanged with an average 29% probability estimated over the next 12 months, just somewhat above normal. GDP is still seen at around 2.25% this year and next, up from 2.1% in 2025, and the unemployment rate outlook remains around 4.25%.

Forecasts for stocks remain buoyant. The S&P 500 is forecast to maintain its current level through year-end and rise 8% to 8,274 next year. The question is whether the forecasts are compatible. Generally, the Fed has to slow the economy to have an effect on inflation, meaning growth would typically need to dip below potential for inflation to decline.