Fed rate cut

Cailian Press reported on October 8 that Federal Reserve Governor Waller said the dot plot may reflect a rate hike in early 2027, followed by a rate cut.

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.

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

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

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

Fitch has improved its global economic growth forecast for 2026 to 2.6% - in June, the agency expected an increase of 2.4%. This is stated in the Global Economic Outlook review. The forecast for the US economy has been increased by 0.2 percentage points - to 2.1%. Fitch also expects the Federal Reserve to raise the rate in December and keep it at this level in 2027. The ECB, according to the agency's forecast, will raise rates in October, but next year the increase will be reversed as oil prices fall to $70 per barrel. Max | Telegram | Newsletter | iOS Application | Android

WALL STREET RETHINKS “ONE-AND-DONE” FED HIKE • • The Fed’s hawkish September meeting is pushing several banks to add another hike or reduce expected rate cuts, including Goldman Sachs, Morgan Stanley, NatWest, Rabobank, Swedbank and Commerzbank. • • The median analyst forecast still sees one additional 25bp hike, although views are split between October and December, while Citi, ING and SEB maintain that September was the final hike.

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

Standard Chartered Expects US Fed to Deliver a 25 Bp Rate Hike in December 2026 vs Prior Forecast of No Policy Change This Year

GOLDMAN SACHS NOW EXPECTS ANOTHER FED HIKE IN OCTOBER • • Goldman Sachs has shifted its Fed call, now expecting another 25bp hike in October after Wednesday’s meeting proved more hawkish than anticipated. • • GS joins ANZ, BofA, RBC and TD Securities in expecting a follow-up hike. The bank highlighted the 16-2 split favoring another hike this year, elevated rate projections and Warsh’s repeated reference to removing a “dose of accommodation.”

US CPI PREVIEW • • Friday’s August US CPI report could be one of the most consequential inflation prints in months, with the outcome potentially tipping the balance on whether the Fed hikes rates at next week’s FOMC meeting. • • Consensus expectations point to headline CPI rising around 0.4% MoM, a sharp acceleration from 0.1% in July, while core CPI is expected around 0.2% MoM. On a year-over-year basis, headline inflation is expected near 3.4%, with core easing to around 2.4%. • • The expected acceleration in headline inflation is largely an energy story. Energy prices are seen rebounding roughly 2.5% MoM after falling 1.5% in July, driven in part by a 4%+ seasonally adjusted increase in gasoline prices. Food inflation is expected around 0.2%, although risks are tilted toward a slightly stronger 0.3% reading. • • Underneath the headline, however, the core picture looks much more mixed. • • Travel-related components could provide upside pressure, with airfares expected to rise around 3% MoM and lodging prices rebounding after two particularly weak months. On the other side, medical-care inflation is expected to moderate, apparel prices could decline, used-car inflation should slow and shelter inflation continues to show signs of cooling. • • Technology goods are another area worth watching. July saw a sharp 1.4% MoM increase in IT goods, partly reflecting previously announced computer price increases. That impulse is expected to fade somewhat in August, potentially removing another source of pressure from core goods inflation. • • THE FED DECISION • • This is where the report becomes especially important. • • The Fed enters the release with policymakers debating whether recent disinflation is sufficient to justify patience or whether inflation remains sticky enough to warrant another increase in rates. With the September FOMC decision just days away, the composition of the CPI report could matter almost as much as the headline number. • • A simple framework for Friday: • • 0.3% core: would represent a meaningful upside surprise and could significantly strengthen the case for a 25bp hike. • • 0.2% core: keeps the decision finely balanced. In that scenario, markets are likely to focus heavily on the unrounded number, shelter, services and the eventual core PCE read-through. • • 0.1% core: would provide much stronger evidence that underlying inflation is cooling and strengthen the case for the Fed to remain on hold. • • Markets are already leaning toward a more hawkish policy path. Fed funds futures have roughly 15.5bp of tightening priced for next week, 23bp cumulatively by October and 37bp by year-end, meaning the CPI print has plenty of potential to force a repricing in either direction. • • Bottom line: don’t just watch headline CPI. • • Watch core inflation, shelter, services, energy and the PCE read-through. And with consensus sitting almost exactly at the dividing line, even a few basis points could matter. • • 0.1% = hold gets stronger. • 0.2% = debate stays alive. • 0.3% = hike risk rises sharply. • • With the Fed decision just days away, Friday’s CPI could set the tone for rates, the dollar and risk assets heading into the FOMC.

Al Arabiya correspondent Karina Kamel: Markets raise the probability of a US interest rate cut to 57% at the September meeting Deutsche Bank raises its forecast for a September rate hike, while JPMorgan predicts a hike at the December meeting French parties hold upcoming consultations on the budget, seeking a solution to the EU's deficit target @MayKhadra_bn #MarketPulse #AlArabiyaBusiness For more analysis and economic news, follow Al Arabiya Business live on YouTube:

Live: Investors have pushed out expectations of a potential rate increase. Ahead of the meeting, investors bet on a quarter point rate hike following either this week’s Fed meeting or certainly at September’s meeting. As things stand, investors are now priced for one quarter point rate hike this year by December, with odds for September now a coin toss.

Live: Investors have pushed out expectations of a potential rate increase. Ahead of the meeting, investors bet on a quarter point rate hike following either this week’s Fed meeting or certainly at September’s meeting. As things stand, investors are now priced for one quarter point rate hike this year by December, with odds for September now a coin toss.

Live: Fed leaves interest rate unchanged, but hike widely expected at next meeting in September

JUST IN: CITADEL SECURITIES EXPECTS SURPRISE FED RATE HIKE TOMORROW • • The call comes as odds of a 25 bps hike at the July meeting fall to 21% on Polymarket .com, down 6 points on the day. The FOMC decision lands tomorrow.

POLYMARKET: 95% CHANCE OF NO FED RATE CHANGE AT JULY MEETING • • Yes: 95% • No: 5% • Yes odds up 18%, about $63.6M wagered. • • The jump follows softer-than-expected inflation data this week that had traders cutting bets on a Fed rate hike. The July FOMC meeting is July 28-29.

Investors have continued to push back their expectations for when the Fed will next cut interest rates. Consensus is now that the Fed will not cut rates again this year and that it will be the middle of 2027 when the central bank finally does lower borrowing costs. Odds are currently clustered around a 0.25 percentage point cut to rates at the Fed’s June or July meeting next year.

Investors have continued to push back their expectations for when the Fed will next cut interest rates. Consensus is now that the Fed will not cut rates again this year and that it will be the middle of 2027 when the central bank finally does lower borrowing costs. Odds are currently clustered around a 0.25 percentage point cut to rates at the Fed’s June or July meeting next year.

US Fed fund futures rise up to 5 ticks; markets price in 80% chance of June rate cut

Fed holds key interest rate steady as economic view improves

*FED LEAVES RATE UNCHANGED

*FED LEAVES RATE UNCHANGED

*FED LEAVES RATE UNCHANGED

Effective fed funds rate: 3.64% January 26th vs 3.64% January 23rd

Effective Fed funds rate: 3.64% January 23rd vs 3.64% January 22nd

US Federal Reserve will resume cutting Fed Funds Rate in June or later, say 55 of 100 economists - Poll.

US Federal Reserve will resume cutting Fed Funds Rate in June or later, say 55 of 100 economists - Poll.

Fed's Jefferson: Fed rate cuts since 2024 have brought the policy rate into range consistent with neutral.

NEW IN: There's now an 82% chance the Fed cuts rates by their meeting on June 17th.