Fed interest-rate decision this month is a closer call than markets think — SkimNews
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- Futures markets assign just a 17% probability to a rate increase at the Fed's Oct. 27-28 meeting, making a hold the implied base case.
- Many economists counter that the October meeting is a much closer call than futures suggest, with some seeing a good chance the Fed will raise rates.
- Investors and Federal Reserve watchers had spent weeks broadly expecting the central bank to hold interest rates steady at the upcoming meeting.
- Fresh inflation concerns based on new data have led economists to argue Fed officials aren't arriving at the October meeting with a predetermined outcome.
- The Oct. 27-28 meeting is the focal point: the piece lays out arguments against a hike alongside reasons specific economists disagree with them.
Why it matters: Futures price only a 17% chance of an October hike while economists cite fresh inflation data in seeing a 'good chance' of one — the gap between these views turns the Fed's widely expected October hold into a genuinely contested decision, with real consequences for bond, mortgage, and equity positioning that has been built on a near-certain pause.
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