Fed expected to hold rates at Wednesday meeting as markets price low odds of further hike
Traders anticipate the Federal Reserve will keep its benchmark rate unchanged on Wednesday, with less than a 10% chance of an additional increase after the September quarter-point hike.
The Federal Reserve is expected to leave its benchmark interest rate unchanged at the Wednesday policy meeting, according to market pricing that shows less than a 10% probability of a follow-up hike after the September quarter-point increase. The CME Group's FedWatch tool reflects this outlook, which would keep the target range at 3.75% to 4.0%.
If the rate hold is confirmed, attention is likely to shift to Fed Chairman Kevin Warsh and any guidance he provides during the post-meeting news conference. Traders also anticipate a possible rate increase at the December meeting, following the October pause.
The meeting is not slated to include updates to the Fed’s “dot plot” or the Summary of Economic Projections, limiting insight into officials’ views on current conditions and the policy trajectory. Some analysts note the potential for dissenting votes, citing regional presidents Beth Hammack of Cleveland, Lorie Logan of Dallas, and Neel Kashkari of Minneapolis, each of whom voted against a hold in July.