Fed set to hold, but September's CPI makes December messy
Markets are pricing roughly 90% odds the Fed leaves rates at 3.75%-4.00% today, with CME FedWatch putting December hike odds near 78%, according to reporting compiled by CNBC. The problem is what landed in between meetings: September CPI rose 0.6% month over month and 3.7% year over year, up from 3.4% in August, while producer prices jumped 1.3% against a 0.5% forecast. Every one of the 100 economists surveyed by Reuters expects a December hike. Powell's press conference this afternoon is the whole ballgame: if he leans into December explicitly, two-year yields move before the ink dries on the statement.
Sources
- Fed to skip October, raise in December — Reuters
- Fed decision expectations — CNBC
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