The U.S. Federal Reserve is widely expected to stand pat on interest rates at the conclusion of its policy meeting later today (Oct. 28).
Financial markets are pricing in a 93% chance that the U.S. central bank will leave the federal funds rate at its current target range of 3.75% to 4%.
The Fed’s latest policy meeting concludes less than a week before the congressional midterm elections, which have focused heavily on concerns about inflation and the cost of living.
While Fed Chair Kevin Warsh has said that he wants to return inflation to the central bank’s 2% target, interest rates are unlikely to change now after a 25-basis point hike in September.
However, markets are pricing in another 25-basis point rate hike from the Fed at its final meeting of the year on Dec. 9.
Futures traders are putting the odds of a December rate hike in the U.S. at 87%.
The Federal Reserve raised interest rates in September of this year for the first time in three years as inflation in America creeps higher.
The latest data showed that inflation in the U.S. rose an annualized 3.7% in September. The increase was much bigger than the 2.4% seen in February of this year, just before the Iran war.
Separately, the Bank of Canada is expected to raise its key overnight interest rate a quarter point to 2.50% when it meets on Oct. 28.
It would be the first interest rate hike in Canada since 2023.
