Fed Decision in October?

There is currently an 84% chance that the Fed makes NO CHANGES to interest rates later this month

There is currently an 84% chance that the Fed makes NO CHANGES to interest rates later this month

Reuters: Weaker economic data in the United States has reduced expectations that the Federal Reserve will raise interest rates again this month. Markets now have an 80% chance of keeping rates unchanged, up from 74% before the jobs report.

This ho-hum labor market report doesn't really change the story for the Fed, whose senior officials had gone out of their way this week to signal that an October rate hike probably wasn't their base-case. • • The biggest development was what it didn't show: few signs from wages or the unemployment rate that the labor market is tightening in ways that would add meaningfully to price pressures. • • The September CPI, due Oct. 14, was always going to be more important than this report, which nevertheless takes some of the hawkish edge off of the recent repricing of the Fed's path in markets.

Live: The slight rise in the unemployment rate to 4.2 percent adds credence to the argument floated by several top officials this week that the Fed can afford to proceed gradually with rate increases after its adjustment in September. Expectations for another quarter-point rate rise at the Fed’s next meeting in October, just days before the midterms, have plummeted in the past few days.

FED PAUSE ODDS SURGE TO 85% AFTER WEAK JOBS REPORT • • Kalshi now prices an 85% chance the Fed holds rates in October after payrolls rose just 29,000 vs. 84,000 expected. • • Unemployment climbed to 4.2%, triggering a sharp dovish repricing of the Fed outlook. •

FED PAUSE ODDS SURGE TO 85% AFTER WEAK JOBS REPORT • • Kalshi now prices an 85% chance the Fed holds rates in October after payrolls rose just 29,000 vs. 84,000 expected. • • Unemployment climbed to 4.2%, triggering a sharp dovish repricing of the Fed outlook. •

Live: Ahead of today’s jobs numbers, investors are betting on the Federal Reserve to keep rates steady at its next meeting in October before raising them another quarter of a percentage point at its meeting in December. Those bets could change depending on the numbers that come out today.

Live: Ahead of today’s jobs numbers, investors are betting on the Federal Reserve to keep rates steady at its next meeting in October before raising them another quarter of a percentage point at its meeting in December. Those bets could change depending on the numbers that come out today.

Live: Ahead of today’s jobs numbers, investors are betting on the Federal Reserve to keep rates steady at its next meeting in October before raising them another quarter of a percentage point at its meeting in December. Those bets could change depending on the numbers that come out today.

Odds of October Rate Increase Drop as Fed's Williams Signals He's Open to a Pause -- Barrons.com

Odds of October Rate Increase Drop as Fed's Williams Signals He's Open to a Pause -- Barrons.com

Traders Now See About A 50/50 Chance Of October Fed Rate Hike Vs About 70% Previously

Traders Now See About a 50-50 Chance of Fed Rate Hike in October, Down From About 70% Previously

Citigroup: Expects the Federal Reserve to keep interest rates unchanged in October and December, and resume rate cuts in June 2027.

STANDARD CHARTERED EXPECTS US FED TO DELIVER A 25 BP RATE HIKE IN DECEMBER 2026 VS PRIOR FORECAST OF NO POLICY CHANGE THIS YEAR

JUST IN: @GoldmanSachs now forecasts a 25 basis point Fed rate hike in October, citing the central bank's own hawkish near-term rate projections.

JUST IN: @GoldmanSachs now forecasts a 25 basis point Fed rate hike in October, citing the central bank's own hawkish near-term rate projections.

Goldman pivots, now forecasts Fed hike in October. • The Fed is likely to raise rates by 25 basis points in October, Goldman said, drawing attention to Fed's own hawkish near term rate projections.

Goldman pivots, now forecasts Fed hike in October. • The Fed is likely to raise rates by 25 basis points in October, Goldman said, drawing attention to Fed's own hawkish near term rate projections.

Live: Stocks closed lower for the day, with the S&P 500 off 0.4 percent, the Nasdaq Composite inching lower and the Dow Jones Industrial Average down more than 1 percent. The move comes lower in stocks came as investors priced in higher interest rates, with investors now anticipating three further quarter point interest rate increases through 2027. The two-year Treasury yield, which is sensitive to change in interest rates, rose 0.6 percentage points. Importantly, Warsh’s commitment, and follow-through, to tackle inflation helped cool worries of rising prices becoming embedded for the long-term. The 30-year Treasury yield nudged lower to 5.35 percent.

Cailian Press, September 17 - Traders estimate that there is about a 50% chance of the Federal Reserve raising interest rates in October.

Traders Price In About 50% Chance Of Fed Rate Hike In October

Morgan Stanley Expects US Fed To Hike Interest Rates By 25 BPs Each In September And December Vs Prior Forecast Of No Policy Change This Year

Goldman is particularly reluctant to change its call: • • "We do not see a strong economic case for raising the funds rate.... We suspect that some FOMC participants will agree with this, and for that reason we see the Fed’s decision as less clear-cut than market pricing implies." • • "But we suspect that most FOMC participants will worry about the potential market reaction to not delivering a hike that recent Fed communication has guided the market to now almost fully price. Chairman Warsh’s Jackson Hole speech led the market to expect a hike if the inflation news was imperfect, and while the CPI was not concerning, it was imperfect."

FED MINUTES: MOST BACKED HOLDING RATES IN JULY, SEVERAL FAVORED A HIKE • • - Many participants said higher rates would likely be necessary if inflation did not fall • - Some said financial conditions might not be restrictive enough to return inflation to the 2% target<b... FED MINUTES: MOST BACKED HOLDING RATES IN JULY, SEVERAL FAVORED A HIKE • • - Many participants said higher rates would likely be necessary if inflation did not fall • - Some said financial conditions might not be restrictive enough to return inflation to the 2% target • - A few who favored raising rates at the meeting judged doing so would help forestall the need for further hikes • - Various participants said tighter financial conditions over the inter-meeting period reflected strong growth and expectations the Fed would adopt a more restrictive stance before long • - Several said price increases over the past year were broad based across goods and services • - Almost all members agreed on retaining statement language affirming the FOMC "will deliver price stability" • • Staff projections showed an inflation forecast similar to June, with the economic outlook a "touch weaker." • • Chairman Warsh said six scheduled meetings per year, held roughly every two months, would allow more information to accumulate between meetings. No decisions were made and Warsh indicated no change to the 2026 schedule. • • The July 29 decision held the target range at 3.50-3.75% in a 9-3 vote, with Hammack, Kashkari and Logan dissenting in favor of a 25 bps increase.

Live: After today’s jobs report, investors are betting the Fed will keep interest rates the same at their next meeting in September. According to the CME FedWatch tool, the odds of the board keeping rates where they are jumped to 56 percent from 45 percent yesterday. For now, investors are still expecting a hike in October, but those odds dropped to 47 percent from 52 percent yesterday.

FED DECISION: JPM'S MARKET PLAYBOOK • • JPMorgan expects the Fed to hold rates, despite markets pricing a sizable chance of a surprise hike. • • Its base case is a hawkish hold (50%), leaving the S&P 500 roughly flat to down 0.5%. • • A dovish hold could lift stocks up to 1%, while a 25bp hike could send the S&P 500 down 1.5%-2%, with tech stocks likely hit hardest.

FED DECISION: JPM'S MARKET PLAYBOOK • • JPMorgan expects the Fed to hold rates, despite markets pricing a sizable chance of a surprise hike. • • Its base case is a hawkish hold (50%), leaving the S&P 500 roughly flat to down 0.5%. • • A dovish hold could lift stocks up to 1%, while a 25bp hike could send the S&P 500 down 1.5%-2%, with tech stocks likely hit hardest.

Warsh's early tone signals continuity, not change. No cuts expected this year according to CME's FedWatch. A hike toward the end of the year is still an open question. Neither this week's CPI print nor the recent weak labor report changes the Fed's stance, since they look past single-month trends.