#FedRateWatch The FOMC decision comes out today at 2:00 PM ET (roughly 7 hours from now for you) — not yet announced. Here's where things stand heading in:
What's expected: Markets are pricing an 85-93% chance of a 25 basis point hike, taking the federal funds rate from 3.50-3.75% up to 3.75-4.00%. That would be the Fed's first rate hike since 2023, ending a long pause/cutting cycle under Chair Kevin Warsh.
Why: Inflation has stayed stubbornly above the Fed's 2% target — headline CPI at 3.4% year-over-year in August, core at 2.4% — with the war in the Middle East pushing energy costs higher (diesel around $6/gallon) and adding further pressure. Warsh's hawkish tone at the Jackson Hole symposium in August ("We have work to do") shifted market odds sharply from a likely hold to a likely hike.
What to watch beyond the headline number: Since the hike itself is heavily priced in, the bigger market movers will likely be the vote count (a unanimous vote vs. dissents would signal how united the committee is), the updated dot plot/Summary of Economic Projections, and Warsh's press conference at 2:30 PM ET.
Want me to check back in once the decision drops?
What's expected: Markets are pricing an 85-93% chance of a 25 basis point hike, taking the federal funds rate from 3.50-3.75% up to 3.75-4.00%. That would be the Fed's first rate hike since 2023, ending a long pause/cutting cycle under Chair Kevin Warsh.
Why: Inflation has stayed stubbornly above the Fed's 2% target — headline CPI at 3.4% year-over-year in August, core at 2.4% — with the war in the Middle East pushing energy costs higher (diesel around $6/gallon) and adding further pressure. Warsh's hawkish tone at the Jackson Hole symposium in August ("We have work to do") shifted market odds sharply from a likely hold to a likely hike.
What to watch beyond the headline number: Since the hike itself is heavily priced in, the bigger market movers will likely be the vote count (a unanimous vote vs. dissents would signal how united the committee is), the updated dot plot/Summary of Economic Projections, and Warsh's press conference at 2:30 PM ET.
Want me to check back in once the decision drops?