The Federal Reserve is expected to leave policy unchanged after its October meeting, keeping the target range at 3.75%-4% following September’s 25 bps rise. Futures pricing implies about a 9% chance of an October move, shifting focus to Chair Kevin Warsh’s press conference at 18:30 GMT after the 18:00 GMT decision and statement. September’s inflation data showed headline CPI at 3.7% year on year, up from 3.4%, while Warsh has said he does not “pre-judge meetings” even as the Fed reiterates its price-stability objective.
Outlook for Future Rate Changes
Markets still lean towards further tightening by year-end, with the CME FedWatch Tool putting the chance of no change by December at about 17%. The September SEP indicated 12 of 18 officials expected one more 25 bps hike in 2025, while four saw two hikes and two saw none; the June dot plot pointed to a 25 bps rise in 2026, then 25 bps cuts in 2027 and 2028. EUR/USD could soften if Warsh signals a December increase, though attention may also swing quickly to the ECB decision on Thursday.
