And Mark Zandi, chief economist of Moody's Analytics, wrote: "I think the Fed will make a mistake if it doesn't raise rates by 25 bps this week, which seems likely. The job market is strong and very close to full employment, inflation is close to target and set to accelerate, financial markets are in good shape and the global economy is stable. They have a window to raise rates, and they should go through it."
On the other side, Mark Vitner, senior economist of Wells Fargo, said: "When GDP growth has struggled to average even 2 percent growth, the global economy is shaky and the most recent month's economic data are inexplicably weak, you do not raise interest rates!"
"God bless Lael Brainard,'' wrote Donald Luskin, chief investment officer of Trend Macrolytics, a reference to the Fed governor who recently offered a detailed speech of why the Fed shouldn't hike.
Respondents say global economic weakness, inconsistent U.S. data and the failure of the market to price in a hike will stay the Fed's hand this week. The election is also seen playing a role, but not because the Fed wants to help one of the candidates; it's more because respondents say the Fed does not want to influence the election either way.
On average, respondents see the Fed funds rate ending the year at about 60 basis points, which would be consistent with a single quarter point hike. Next year, the funds rate is forecast to rise to 1.16 percent and to 1.8 percent in 2017. The terminal rate, or where the Fed will stop hiking this cycle, is forecast to hit 2.48 percent, about 20 basis points higher than the prior survey and closer to the Fed's own long-run rate of 3 percent.
Respondents, who include economists, fund managers and strategists, think it will take the Fed two years to get to that terminal rate, meaning they take the Fed at its word that rate hikes will be gradual.
Gradual hikes happen in a context of what the survey shows is an expectation of just modest growth and inflation over the next couple years. GDP is forecast to increase 1.82 percent this year from last year, and bump up to just 2.28 percent in 2017. Headline inflation, now running at 1.1 percent, is forecast to rise to 1.5 percent this year and just over 2 percent next year.
The outlook for stocks is similarly underwhelming. Respondents on average peg the level of the S&P at the end of 2016 at just 2,160, about a half a percentage point higher than the current level. In 2017, the S&P will rise to 2,255, or a 5 percent gain from the where it is now.
The 10-year yield is forecast to 1.78 percent this year and 2.28 percent by 2017.