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Most corporate economists surveyed by Wolters Kluwer said the increase in U.S. borrowing costs since August was not large enough to cool inflation or materially slow growth. The finding, reported by CFO Dive on Oct. 12, 2026, is a judgment about the economy’s direction—not proof that Federal Reserve policy has had no effect.

What the survey says about borrowing costs

Fifty-nine percent of the corporate economists in the Wolters Kluwer survey said the rise in borrowing costs since August was too small to cool inflation or slow economic growth. Their assessment implies that demand, pricing power and investment remained resilient despite higher interest rates.

The survey’s sample size, field dates, question wording and weighting method were not disclosed in the published report. The 59% figure therefore describes the surveyed group’s opinion at that time; it is not an independent test of how much monetary policy has reduced demand, nor a guarantee that additional rate increases will work in a particular way.

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Higher rates normally restrain inflation gradually by making mortgages, business loans, credit lines and other financing more expensive. They can reduce discretionary spending and investment, but the effect arrives with lags and can be offset temporarily by strong household demand, fiscal conditions, supply constraints or rising productivity. That is why “too low” in this headline means “too low in respondents’ assessment,” not that borrowing costs are objectively ineffective.

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Why respondents still saw inflation as the main threat

Price pressures were the largest threat identified by the surveyed economists. They expected core personal-consumption-expenditures inflation to edge higher in the near term, ease only slightly in the second half of 2027 and remain above the Federal Reserve’s 2% target.

Those are forward-looking expectations, not later measured results. Core PCE excludes food and energy and is the Fed’s preferred underlying inflation gauge, but the survey report does not establish what the eventual readings will be.

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What economists expected the Fed to do next

Eighty-four percent of respondents expected one additional 0.25-percentage-point federal-funds-rate increase before 2027. CFO Dive reported that the Federal Open Market Committee had raised its benchmark rate by a quarter point the previous month, placing the target range at 3.75%–4%, with all 12 voting members supporting the move. The report also said the Fed’s September projections showed a median path consistent with one more quarter-point increase.

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Those policy details are time-sensitive. The September projections describe officials’ views at that meeting, while the 84% figure describes survey respondents’ expectations. Neither is a binding commitment by the FOMC, and future decisions depend on incoming inflation, employment and financial data.

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Growth forecasts were stronger, not weaker

The same corporate-economist panel raised its estimate for third-quarter GDP growth to 2.9%, a 0.4-percentage-point upward revision. Respondents cited stronger consumer spending and business investment. Again, this was a forecast reported at the survey date; it should not be treated as the final GDP estimate.

Measure Survey result or forecast How to read it
Borrowing-cost assessment 59% said the increase since August was too small to cool inflation or slow growth Opinion of surveyed corporate economists
Next Fed move 84% expected one more 0.25-point increase before 2027 Expectation, not a policy decision
Third-quarter GDP 2.9%, revised up 0.4 percentage points Survey forecast, not a realized result
Business spending 12.6% annual rate in 2026; 6.2% in 2027 Forecast growth rates
Core PCE inflation Near-term uptick, slight easing in late 2027, still above 2% Inflation outlook rather than recorded data

Business spending and AI added to the tension

The panel forecast business spending to grow at a 12.6% annual rate in 2026 and 6.2% in 2027. Strong investment helps explain why respondents could simultaneously expect more rate increases and continued growth: companies were still expected to spend even as financing became more costly.

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Artificial intelligence produced a similarly mixed signal. Every surveyed economist expected AI initially to support GDP growth, while 83% expected initial AI adoption to add to inflation. Faster output and investment can lift growth, but intense demand for computing capacity, labor and related infrastructure can raise prices before supply catches up.

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What a separate NABE panel expected

A separate National Association for Business Economics panel forecast 2.1% GDP growth for 2026, 0.1 percentage point above its June forecast. Nearly half of its panelists did not expect the next downturn to begin before 2029.

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The NABE panel also reported a shift in perceived downside risks: 18% named a monetary-policy mistake as the leading risk, more than triple the earlier share. Chair Yelena Maleyev said, “The mix of risks is shifting, however,” while noting that fewer panelists viewed broadening geopolitical conflicts as the top risk. This is a different panel and should not be combined with the Wolters Kluwer percentages.

How Cleveland Fed remarks fit the picture

In an Oct. 12 speech, Cleveland Fed President and CEO Beth M. Hammack said, “A restrictive monetary policy stance is appropriate to ensure a timely return to 2 percent inflation.” Her remarks provide context for why some policymakers may favor keeping rates high, but she explicitly described her views as her own, not necessarily those of the Federal Reserve System or her FOMC colleagues.

Hammack also cautioned, “Explaining my reaction function is not a prediction for policy.” In other words, her response would depend on incoming data and economic conditions; the speech did not announce an FOMC decision. The full remarks are available from the Federal Reserve Bank of Cleveland.

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What the findings mean for readers

  • Higher rates may still be working. The survey does not measure the counterfactual economy without rate increases; it records respondents’ view that the increases so far were insufficient.
  • Inflation and growth can remain strong together. Robust consumption, investment and AI-related spending can sustain activity while prices remain above target.
  • Forecasts can change. The GDP, spending, inflation and rate figures are expectations made in 2026, not outcomes that can be assumed in advance.
  • Policy is conditional. The expected additional quarter-point move and Hammack’s restrictive-policy comments are signals about likely reactions, not promises.

The clearest answer to “Are borrowing costs still too low to cool inflation?” is therefore: most surveyed corporate economists thought so at the time of the survey, while the evidence presented does not establish that conclusion as a settled fact. It shows a combination of persistent inflation concern, stronger growth expectations and a perceived likelihood of further tightening.

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