Analysis: It is uncommon for the Federal Reserve to hike rates in October or November before midterm elections, and the market is focused on Warsh's remarks.

BlockBeats news, October 15 - The U.S. September CPI rose 3.7% year-over-year and 0.6% month-over-month, while core CPI rose 2.6% year-over-year and 0.3% month-over-month, all exceeding market expectations. Following the release of the inflation data, market bets on a 25 basis point rate hike by the Federal Reserve in October surged to approximately 40%, up from about 20% the previous day.

The Federal Reserve just raised rates by 25 basis points last month, the first hike since 2023. The next interest rate decision will be announced on October 28, just 6 days before the U.S. midterm elections on November 3.

Inflation remaining persistently above the Federal Reserve's 2% target and resilient economic activity provide justification for further rate hikes. Economists from institutions such as Jefferies and Nationwide believe that both October and December rate hikes have data support; however, some analysts expect that the Federal Reserve may choose to hold off until December, taking into account the timing of the elections and potential economic vulnerabilities.

Historical data shows that it is uncommon for the Federal Reserve to raise rates in October or November before midterm elections. The market will focus on remarks by Federal Reserve Chairman Kevin Warsh before he enters the pre-meeting blackout period to gauge his policy stance. This meeting will not only test the Federal Reserve's determination to address a rebound in inflation, but also examine its ability to maintain policy independence and market trust during a politically sensitive period.