LIVE: Federal Reserve expected to hold rates steady today

The Federal Reserve is very likely to maintain rates as they are despite rising inflation above the 2% target on Wednesday.

According to CME Group’s FedWatch tool, traders see less than a 10% chance that the Federal Open Market Committee (FOMC) will raise rates again after its 25-basis-point hike in September. That would leave the benchmark interest rate between 3.75% and 4%.

While expectations of the decision have been set already, all eyes will now be on Fed Chair Kevin Warsh and his post-decision press briefing. The markets will be listening carefully to see whether there is potential for another hike in December.

The Fed won’t release a new dot plot or Summary of Economic Projections at this meeting, meaning investors won’t get updated forecasts showing where officials expect interest rates or the economy to go.

Minutes from September’s meeting showed that most Fed officials believed one more rate hike would be needed before the end of 2026. However, policymakers and economists remain divided over whether the Fed should act in October or wait until December for more economic data.

The problem is that US inflation is picking up again.

September’s Consumer Price Index (CPI) rose 3.7% year over year, partly because of higher energy costs. Consumer inflation has also remained above the Fed’s 2% target for one of the longest stretches on record.

On the other hand, the Producer Price Index (PPI), which gauges inflation at the wholesale level, increased by 6.3% year-over-year in September. This marked the largest increase in one year since 2022.

At the moment, traders anticipate the Fed to keep interest rates steady in October before increasing them in December.