Fed to hit pause on rate hikes, but maybe not for long
- Federal Reserve policymakers, led by Chairman Kevin Warsh, convene October 27–28 to decide on interest rates, with expectations widespread they will maintain the current target range of 3.75% to 4.00%.
- Persistent inflation and hotter-than-expected economic data prompted this pause, following September's quarter-point hike that lifted the target range as officials signaled inflation remained elevated.
- Data from the CME FedWatch Tool shows a 90% probability of a hold, a decision observers suggest helps officials avoid political friction ahead of November 3 midterm elections.
- Futures markets currently price a 74% chance of a 25-basis-point increase in December, reflecting consensus that policymakers will prioritize this pause before resuming tightening to combat persistent inflation.
- Warsh faces intense scrutiny regarding his communication strategy, as investors monitor his post-meeting press conference for clues on his commitment to the 2% inflation target.
139 Articles
139 Articles
What to expect from the Federal Reserve's next rate decision
The Federal Reserve is expected to keep interest rates on hold on Wednesday, six days before the US midterm elections, but with inflation at 3.7% and oil prices still elevated, investors see another hike in December as likely and will scour Chair Kevin Warsh's words for clues.
Although stubborn inflation could justify another rate hike, the Fed is expected to leave the target range of 3.75-4 percent unchanged at its meeting on Wednesday. Annual inflation accelerated to 3.7 percent in September, and price pressures are also being amplified by rising fuel prices due to the Iran war and investments related to artificial intelligence. The market is nevertheless pricing in a nearly 90 percent chance of keeping rates on hol…
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