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Fed Likely To Hold Rates Steady, Says Wolfe Research's Roth — Analysts See Inflation Risks Keeping December Hike In Play
The Federal Reserve is 'overwhelmingly likely' to leave interest rates unchanged on Wednesday, according to Wolfe Research Chief Economist Stephanie Roth, who anticipates a pause in October despite persistent inflation pressures.
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What happened
The Federal Reserve is ‘overwhelmingly likely’ to leave interest rates unchanged on Wednesday, according to Wolfe Research Chief Economist Stephanie Roth, who anticipates a pause in October despite persistent inflation pressures.
Confirmed
Global impact / market context
A rate pause would keep borrowing costs for companies and households at current levels, giving businesses time to plan capital spending. Roth expects the Fed to signal that further rate hikes remain possible after hotter-than-expected September inflation data.
Analyst inference
September CPI rose 3.7% year-over-year, while core CPI increased 2.6%, and the Fed's preferred PCE gauge rose 3.4% annually in August. Rising Treasury yields have already tightened financial conditions and weighed on housing activity, doing some of the Fed's work.
Analyst inference
What to watch
- The Fed is set to announce its policy decision at 2 p.m. ET, followed by a press conference with Chair Kevin Warsh at 2:30 p.m. ET. Confirmed
- Roth told Bloomberg she expects Fed Chair Kevin Warsh and other policymakers to signal that further rate hikes remain on the table following hotter-than-expected September inflation data. Proposed
- Dario Perkins of TS Lombard says the Fed could face additional rate hikes if AI-driven demand continues to fuel inflation, a channel that could raise costs for companies. Analyst inference