Futures markets are putting the probability of a Federal Reserve rate hike on Wednesday at around 20%

That hasn't stopped economists at both BNP and Barclays calling a hike, though they reckon it'll be a close call.

Barclays senior U.S. economist Rob Martin

  • "We're not the crazy house -- this is the first time we've been so far out of consensus on the view," Martin said. "We've kept our conviction on September because we think that's what the FOMC has communicated to us -- that's what we think the chair and the vice chairman were talking about at Jackson Hole."

Laura Rosner, senior U.S. economist in New York at BNP:

  • "There is no perfect time -- there will always be some uncertainties in the data"
  • Despite a multitude of shocks through the last nine months, which have delayed the Fed, hiring has continued to be robust. There is a window of opportunity for the Fed to continue normalizing, and we think it'll take it."
  • "Markets are betting against it because they think the Fed has chickened out for the last nine months, so why wouldn't they do it again? But we can attribute the Fed's decision to pause to very specific shocks that just were coming from all directions. Now, here we are, the dust has settled, risks have diminished, and you have data that's decent. So if the Fed is on a regimen of gradual hikes, why shouldn't it continue?"

via Bloomberg