Federal Reserve expected to hold interest rates steady this week
Summarised from 2 outlets · Updated 27 Oct, 11:38 · Archive
The Federal Reserve is expected to leave interest rates unchanged at its meeting this week, according to most economists and a survey of market participants.
The Federal Reserve is scheduled to announce its latest interest rate decision at 2 p.m. ET on Wednesday. Most economists and 93 per cent of respondents to a CNBC survey of fund managers, strategists and economists expect the central bank to leave its benchmark rate unchanged at 3.75 to 4 per cent.
Inflation remains elevated. Headline consumer prices rose 3.7 per cent annually in September, with gasoline prices above $4 a gallon accounting for more than half of that month's increase. Core inflation, excluding energy and food, rose 2.6 per cent year-on-year. The Fed targets annual inflation of 2 per cent.
Despite the inflation concern, the Fed appears intent on tightening at a measured pace after raising rates by a quarter point in September—its first increase in three years. However, survey respondents expect further action: 76 per cent anticipate a rate hike at the Fed's December meeting, and more than half expect about two rate hikes in 2023. Some survey respondents argued that rate increases should have come sooner given inflation readings and nominal GDP growth of 6 to 8 per cent, though others disagreed on the urgency of further tightening.
How it is being reported
- Fed rate hikes are coming, but not this week: CNBC surveyThe CNBC Fed Survey shows that 93% of respondent expect a pause at the Federal Reserve meeting taking place this week.CNBC · 27 Oct, 11:10
- Is the Federal Reserve likely to raise interest rates this week?Fed officials will unveil their latest interest rate move this week, following the September rate hike, the first in three years.CBS News · 26 Oct, 20:10
In this story: Federal Reserve · CNBC · Capital Economics · Janus Henderson Investors · United States
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