Fed is widely expected to hold interest rates steady, with December hike in sight

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Markets put the odds of an October hike below 10% as Fed Chair Kevin Warsh prepares for a 2:30 p.m. ET press conference

Kevin Warsh, former governor of the US Federal Reserve, during the International Monetary Fund (IMF) and World Bank Spring meetings at the IMF headquarters in Washington, DC in April 2025. (Tierney L. Cross/Bloomberg via Getty Images)

The Federal Reserve looks set to make no change to rates on Wednesday, with traders anticipating a quarter-point increase at its December meeting, according to CNBC.

Markets assign odds of under 10% to a hike this week. A hold would keep the federal funds rate in a range of 3.75% to 4%. The Fed will issue its statement at 2 p.m. ET, and Fed Chair Kevin Warsh will take questions at a news conference half an hour afterward, according to Bloomberg.

The expected hold follows September inflation data that came in hotter than forecast. Consumer prices posted their sharpest increase in five months, and producer prices posted their biggest jump in over four years, according to Bloomberg.

Several Fed officials have argued against moving now. Vice Chair Philip Jefferson and New York Fed President John Williams each argued earlier this month, in remarks delivered separately, that the central bank has time to assess the economy before considering another increase, according to Bloomberg. Fed Governor Christopher Waller said officials retain room to choose when to act and are not obliged to raise rates at back-to-back meetings, according to Bloomberg.

Warsh has declined to signal what the Fed will do. "I don't believe in saying now what I might do at the meetings that we have in the balance in this year," he said at the International Monetary Fund's annual meetings in Bangkok, according to Bloomberg. He will probably face a question on the committee's projection of one more hike this year, according to Bloomberg.

The meeting will not include a new "dot plot" of rate forecasts or an updated Summary of Economic Projections, according to CNBC.

Dissents are possible. Cleveland Fed President Beth Hammack, Dallas Fed President Lorie Logan and Minneapolis Fed President Neel Kashkari each cast a no vote on the July hold and might do so again, according to CNBC. Bloomberg said Logan recently stated that further hikes are warranted, though higher Treasury yields could also help cool the economy.

The Fed raised its benchmark rate by a quarter point in September, its first increase since July 2023, on a unanimous 12-0 vote. At the July meeting, the committee held rates on a 9-3 vote, with three regional bank presidents favoring a hike. Sixteen of 18 policymakers projected in September that at least one more increase would come this year.

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