FOMC Ends 2-Day Meeting Wednesday as Markets Price 84% Odds of a December Hike

3 articles · Updated · yardeniquicktakes.com · Oct 25

Wednesday’s FOMC decision and Fed Chair Kevin Warsh’s press conference are the week’s main event, with markets assigning just 9% odds of a hike now but 84% for December.
2.7 implied rate hikes over 12 months reflect a still-tight policy outlook even as one market view argues the Fed should raise rates this week but likely will not so close to midterm elections.
Thursday’s data could reshape that path: Atlanta Fed GDPNow sees Q3 growth at 3.5%, while Cleveland Fed nowcasting puts September core PCED at 3.1% and headline PCED at 3.6%.
Markets enter the meeting under pressure after the S&P 500 fell 0.5% last week and the Nasdaq 0.7%, with Thursday’s 2.9% Nasdaq drop tied to worries over AI funding costs and availability.
WTI crude above $100, the 10-year Treasury yield at 5.0%, and earnings from 36% of S&P 500 companies add to a week that will test whether strong growth can coexist with renewed inflation pressure.