The Federal Reserve announces its first interest rate decision since September’s hike today, at 18:00 UK time. The target range stands at 3.75% to 4.00%, and markets overwhelmingly expect a hold. The meeting turns on what Chair Kevin Warsh says at his 18:30 press conference about further increases, a message that can surprise even when the decision itself does not.
Key points
- Decision due at 18:00 UK time
- Markets expect a hold
- Warsh press conference at 18:30
- Open question: signals on further hikes
- GDP and PCE data due tomorrow
What is expected
The Federal Open Market Committee (FOMC), the Fed’s rate-setting body, sets the target range, the official band for overnight US bank lending rates. On the 16th of September it voted 12–0 to raise the range by 25 basis points, a basis point being one hundredth of a percentage point. The upper bound had fallen from 5.00% in October 2024 to 3.75% by December 2025, and is now 4.00%.
There is no survey consensus for today’s decision. The data calendar lists 4.00% as its estimate, matching the current upper bound, but that field is not a poll.
What has changed since the last meeting
The September decision came with a statement and new projections. The statement, from the Federal Open Market Committee, read:
Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.
Federal Open Market Committee
The committee’s median projection for the fed funds rate at the end of 2026 rose to 4.1% from 3.8% in June, above the current 4.00% upper bound. Its median projections for 2026 PCE inflation, the Fed’s preferred measure of price rises, moved to 3.7% from 3.6%, and for core PCE, which strips out food and energy, to 3.4% from 3.3%.
What to watch
- Whether the statement keeps the sentence that the policy action will support a timelier return to the 2 percent goal, or rewords it.
- Whether Warsh points to more hikes at 18:30, the question the whole meeting turns on.
- Tomorrow at 12:30 UK time: third-quarter GDP, with a calendar estimate of 3.2% quarterly growth against 2.2% previously, and September PCE inflation at 3.6% a year against 3.4%, with core PCE at 3.1% against 3.0%.
Where markets stand
The S&P 500 closed yesterday at 7,722.60, up 0.6% on the day. US cash markets have not opened yet, so that close is the latest level before the decision.