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Fed seen holding rates this week as inflation reports arrive
Reuters reported that Federal Reserve officials have signaled they will leave the policy rate unchanged at this week's meeting, while markets still expect further increases later [1].
- New headline Was: “Fed to hit pause on rate hikes, but maybe not for long”
- Our desk filed its story
Based on reporting by Reuters
Federal Reserve policymakers have signaled they will leave the U.S. policy rate unchanged at their Oct. 27-28 meeting, after a September increase, Reuters reported on Monday1.
The report said the federal funds target is expected to stay in a 3.75% to 4.00% range, and that as of Friday rate futures implied about a 90% chance of a hold1.
Reuters said upcoming government figures were expected to show inflation rose last month beyond fuel prices and that growth strengthened last quarter, with unemployment at 4.2%1.
The account attributed the expected pause in part to a jump in Treasury yields after September, and said New York Fed President John Williams and Vice Chair Philip Jefferson had indicated a wait for more data1.
Nationwide chief economist Kathy Bostjancic told Reuters the data in her view still supported another increase, while BMO's Scott Anderson said he expected at least one dissent from Cleveland Fed President Beth Hammack1.
Gregory Daco of EY-Parthenon told Reuters Chair Kevin Warsh would need to address any impression that a hold so close to the Nov. 3 midterm elections was political, without undercutting the Fed's inflation fight1.
Anderson said he now expected two more rate increases; Reuters said economists projected September PCE inflation at 3.6%, above the Fed's 2% goal1.