Markets expect the Federal Reserve to keep interest rates unchanged this week;December another rate hike remains possible

AT A GLANCE

The market expects the Federal Reserve not to raise interest rates this week; Warsh needs to explain why and leave open the possibility of another rate hike within the year.

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Markets expect the Fed to hold steady this week; Chair Warsh must explain why it is not raising rates

BlockBeats News,October 27, according to The New York Times, markets broadly expect the Federal Reserve to keep interest rates unchanged at this week's (October 27 to 28）FOMC meeting. Federal Reserve Chair Kevin Warsh faces a communications test: he must explain why the Fed has chosen not to raise rates while inflationary pressures remain elevated, while also demonstrating that its resolve to fight inflation has not weakened and keeping open the possibility of another rate hike this year.

The report said that the Federal Reserve September has raised rates once, after which markets at one point priced in October another rate hike; however, officials including New York Fed President Williams, Federal Reserve Vice Chair Jefferson, and Governor Waller said at the September end to October beginning that “it is possible to wait a little longer,” causing the probability of a October rate hike to fall from more than 70%to less than 30%. Meanwhile, elevated oil prices and demand for materials and electricity from AI infrastructure have increased September price pressures, while the Nasdaq 100 Index has fallen more than October 6 from its record high since 7%，10. The yield on the -year U.S. Treasury had also remained above 5%for several consecutive weeks. Stephen Stanley, chief economist at Santander U.S. Capital Markets, said he expects rates to remain unchanged this week but believes December could still raise rates again; Warsh needs to explain “why not act in October, while also explaining why December remains under consideration.”

Since taking office in May, Warsh has provided little forward guidance on the interest-rate path.July A post-meeting press conference after holding steady once triggered market volatility because its wording was overly brief; subsequently,August hawkish remarks and September rate hike, along with the dot plot's signal of “one more increase this year,” temporarily repaired communications. This week's decision comes close to the November 3 U.S. midterm elections. Trump previously criticized September rate hikes, and analysts believe Warsh must also avoid having the decision to hold steady interpreted as politically motivated.

Original link https://m.theblockbeats.info/flash/373933

Key points

The report said that markets broadly expect the Federal Reserve to keep interest rates unchanged at the October 27 to 28's FOMC meeting.
The Federal Reserve September has raised rates once,October the probability of another rate hike fell from more than 70%to less than 30%。
Elevated oil prices and AI demand for infrastructure-related materials and electricity were reported to have increased September price pressures.
The Nasdaq 100 Index has fallen more than October 6 from its record high since 7%。
Stephen Stanley expects rates to remain unchanged this week but believes December could still raise rates again.
The actual FOMC decision has not yet been announced in this evidence.

AI-assisted interpretation

The following is analysis, separate from reported facts. Verify important claims independently.

The market is currently betting that the Federal Reserve October will not adjust interest rates for now. Warsh needs to explain why he is not raising rates despite inflationary pressures, while not ruling out December raising rates again.

Why it matters to readers

The interest-rate decision and the chair's wording will affect the market's assessment of the future rate-hike path; the evidence shows that these expectations have already been accompanied by a pullback in U.S. equities and changes in U.S. Treasury yields.

This concerns borrowing costs, bond yields, and equity valuations. The key issue is not only whether rates will be raised this week, but also whether the Federal Reserve will continue to signal future rate hikes.

Risks and unknowns

FOMC The actual decision has not yet been announced.
The article does not provide independently verifiable materials for the market data, personal information, or reporting content.
The evidence does not state what wording Warsh will ultimately use.

Markets expect the Federal Reserve to keep interest rates unchanged this week;December another rate hike remains possible

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