September 17, 2015 / 10:32 PM / 4 years ago

Wall Street banks eye December for Fed liftoff: Reuters poll

A sign hangs in front of U.S. flags outside of the New York Stock Exchange in New York September 1, 2015. REUTERS/Lucas Jackson

NEW YORK (Reuters) - After the Federal Reserve decided to leave interest rates unchanged, a majority of Wall Street’s top banks now expect the U.S. central bank to begin hiking rates in December, according to a Reuters poll conducted on Thursday.

Twelve of the 17 primary dealers, or the banks that deal with the Fed directly, polled said they expect the Fed to raise rates in December. Two pegged the date in October, and three in March 2016. For table of poll results see

“We view this as a tactical delay and have pushed out our forecast of the first hike to December. However, we still expect the Fed to hike faster than the market is pricing in, with four hikes in both 2016 and 2017,” wrote economists at Bank of America-Merrill Lynch, who moved their expected first increase to December from September.

The U.S. central bank said an array of global risks and other factors led it to avoid a hike, which would have been the first in nearly a decade. The Fed’s benchmark rate has been held in a range of zero to 0.25 percent since December 2008.

The Fed maintained its bias toward a rate hike sometime this year. It has policy meetings in October and December.

In a poll conducted earlier this month, seven banks had expected a rate increase in September. Among the seven that had expected a September hike, three moved to December, one to October and one moved to March.

The poll was conducted following the Fed’s statement and press conference on Thursday afternoon.

Reporting by Jessica DiNapoli; Editing by Chizu Nomiyama

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