Fed Seen Holding Rates Steady Despite Inflation Pressures

Dow Jones10-28 21:55

0954 ET - Although September CPI and PPI came in hotter than expected, the AI buildout hasn't shown material signs of slowing and energy prices remain elevated, market participants still expect the Fed to hold rates steady in a target range of 3.75% to 4.00% on Wednesday. That follows comments from some senior Fed officials signaling they are in no rush to raise rates this month. "Williams' and Jefferson's comments predated the inflation surprise, and we don't believe their statements were an indirect conduit for Warsh's views to the markets, as may have been the case with past chairs," notes Oxford Economics. If the committee holds rates steady, it could draw dissents from officials such as Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan, who have signaled that further monetary policy tightening is needed.

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