The Federal Open Market Committee announces its decision at 2:00 PM Eastern today, and the outcome investors expect is a hold. Futures tracked by CME FedWatch put the probability of the target range staying at 3.75 to 4.00 percent at roughly 90 percent, according to Reuters, after the committee raised the range by a quarter point in September, its first increase since 2023, and held it at its late October meeting.
The case for patience is the one officials signalled before the blackout: the labour market looks stable, while inflation remains above the 2 percent target, with the PCE price index having reached a three year high of 3.9 percent in May. Former Cleveland Fed president Loretta Mester told AFP the data show no evidence of inflation moving towards target, which in her view argues for further increases in time, but not necessarily today. The decision lands on midterm polling day, and officials have said the election calendar does not enter the decision.
No new Summary of Economic Projections or dot plot accompanies this statement, so there are no updated official forecasts to trade against. That puts the weight on two things: any dissents in the vote, and Chair Kevin Warsh’s press conference at 2:30 PM Eastern. Warsh has offered little forward guidance since taking over, saying he does not prejudge meetings, and analysts at Goldman Sachs have warned that watchers hoping for major revelations may be disappointed.
Beyond today, markets price roughly a 75 to 85 percent chance of another quarter point increase at the December 8 to 9 meeting, and some forecasters, including Monetary Policy Analytics, now see three more quarter point rises across the coming meetings. US yields go into the decision softer: the site tables put the 5 year at 4.69 percent, down 2.8 basis points on the day, the 10 year at 4.89 percent, down 3.5 basis points, and the 30 year at 5.27 percent, down 4.0 basis points, with the dollar index at 101.83, up 0.08 percent.