'US Federal Reserve unlikely to increase interest rate in December'

Zee Media Bureau

New Delhi: The financial heads at some of the world's largest companies are of the view that the U.S. Federal Reserve are unlikely to make any substantial policy changes at its next meeting in December, according to a new survey released by CNBC.

As per the survey, only 50 percent of 51 chief financial officers of European and Asian companies believed that a rate hike was imminent in the Fed's policy meeting in December, while the other 50 percent felt that the Federal Reserve will defer raising the rates: to January, later in 2016, or after 12 months.

While 27 percent predicting that it would only raise rates in late 2016. One respondent in the poll even predicted that the Fed would hold off from a rate rise during the next 12 months.

The survey - conducted between November 16 and 25 - includes CFOs from companies such as Unilever and Lenovo.

The results are in stark contrast with the view of market-watchers.

The report said that based on the CME Group's (Chicago Mercantile Exchange & Chicago Board of Trade) 30-day Fed fund futures price - which has long been used to express the market's view on the likelihood of changes in U.S. monetary policy - traders estimate that there is a 78 percent of a hike in December.

That number is up from 52 percent at the same point last month as Chair Janet Yellen and her team have started to sound a more hawkish tone as the policy meeting approaches.

The U.S. central bank has held the federal funds rate near zero since the aftermath of the global financial crisis.

It appears that Asian CFOs, compared to their European counterparts, are more willing to believe that the Fed could spring another surprise this time and show similar caution at its December 15-16 meeting.

The same number of Asian CFOs (35 percent) see the Fed hiking in late 2016 as they do in December. 

66 percent of European finance executives predicted it would change policy next month.