Top forecaster: The Fed may raise interest rates by 50 basis points in December.

Prestige Economics President Jason Schenker said the FOMC may consider a larger 50 basis point rate hike in December. Schenker, who was among the earlier forecasters of the Fed's most recent rate hike, now believes the Fed may "let policy effects catch their breath" after a September hike before considering a larger increase in December. Schenker expects that if a larger hike occurs in December, further rate increases may be paused in early next year. Between the October and December meetings, Fed officials will also receive two employment reports and another CPI reading, which could inform their future decisions. Schenker said: "Although they only have to wait six weeks, they will get more data. If they find that 25 basis points has no effect, then I think they may roll out a 50 basis point hike." Schenker expects a larger hike could lead to a pause in further rate increases in early next year; while if only a 25 basis point hike occurs in December, the likelihood of another rate hike in the first quarter of next year is relatively high.