Fed October rate hike probability only about 10%, market bets on another hike in December, Warsh's speech next week in focus

BlockBeats news, October 24 - The market currently widely expects the Federal Reserve to keep interest rates unchanged at next Wednesday's interest rate decision. The Chicago Mercantile Exchange's FedWatch tool shows that the market expects only about a 10% probability of a 25 basis point rate hike by the Fed in October. Recently, some Fed officials have leaned toward pausing rate hikes to assess inflation trends and the impact of the Middle East conflict pushing up energy prices.

Although expectations for an October rate hike have cooled, the market still widely expects the Fed to raise rates again in December. Goldman Sachs Chief US Economist David Mericle believes the Fed may adopt a pace of raising rates by 25 basis points every other meeting, with the next hike possibly in December, followed by another hike in March next year.

Another major focus of this meeting is the press conference by Fed Chair Warsh. Since Warsh has consistently avoided providing clear forward guidance, the market will focus on his statements regarding recent inflation, financial conditions, and the threshold for further monetary policy tightening in 2027.