Fed Expected to Hold Rates Wednesday, Signal December Hike

The Federal Open Market Committee is widely expected to leave its key interest rate unchanged at its meeting on Wednesday, with markets pricing only a one-in-ten chance of a quarter-point increase, according to CME Group's FedWatch tool. Officials have debated whether to follow September's quarter-point hike as inflation runs above the Fed's target for a fifth year while unemployment hovers near historic lows. Most economists expect the next increase in December, with Goldman Sachs' David Mericle projecting hikes at every other meeting, putting the next moves in December and March. The decision will be followed by Chair Kevin Warsh's press conference. Warsh has avoided forward guidance, though Nomura's Ruchir Sharma expects him to implicitly endorse a December hike. A pause would give officials time to assess how fuel price increases tied to the Iran war are feeding into inflation.