The U.S. Federal Reserve will hold fire a bit longer on its first interest rate rise in nearly a decade, according to slightly more than half of economists polled by Reuters.
The forecast represents a shift in sentiment, as last week’s poll found a slight majority predicting the Fed would pull the trigger at its meeting on Thursday.
The survey of 80 economists based in North America and Europe was taken over the last 24 hours as each panelist was asked to reconfirm if they still held the same position, while a few who couldn't be reached last week were also polled.
Since last week's poll, five economists have changed their call for a hike on Thursday and now expect the Fed to hold. None changed from predicting a hold to forecast a hike, suggesting that momentum is moving against a Fed move this week.
But it has gone right down to the wire, with the number of economists predicting no change in rates now outnumbering those betting on a hike by 45 to 35.
Among primary dealers, 12 banks expect the Fed to hold and the remaining 10 expect a hike.
Further demonstrating the close division on the outcome of Thursday's Fed meeting, CNBC's poll of 51 economists had a different outcome, with 49 percent forecasting a rate hike this week and 43 percent saying it will come later.
The U.S. economy has been performing relatively well, although it has been weak compared with past recoveries.
So far it has generated little inflation, even with interest rates at 0-0.25 percent for more than half a decade and adding trillions of dollars to the balance sheet via bond purchases.
While the Fed has delayed hiking the rate, dark clouds have gathered over China, global financial markets, and by extension, the global economic outlook, which the Fed can't ignore.
"Fed Chair Janet Yellen has been conspicuously silent, with no significant comments since July's congressional testimony," wrote Standard Chartered senior economist Thomas Costerg in a note explaining the decision to switch from predicting a September hike to an increase in December. "We think the recent global market volatility – driven by ongoing concerns about global growth – has raised the bar for a first rate hike near-term."
To complicate matters, interest rate futures markets are pricing in roughly a one-in-four chance of a hike on Thursday.
That suggests that for all of the preparation the Fed has done to signal to markets to be ready, they are not positioned for a move now. And bond market pricing has been at odds with the Fed's own views on the path for rates for a long while.
If the Fed doesn't go on Thursday, the most likely date for lift-off is December. Only five of 80 economists don't expect a rate hike this year.
The other issue is forecasters' track record.
In 2009, a year after the collapse of investment bank Lehman Brothers and with the economy already in the depths of an historic, deep recession, many economists were predicting the Fed would hike rates as early as the first quarter of 2010.
It's been more than half a decade since then and they - as well as financial markets - still aren't sure when it will happen.