U.S. annual inflation reached 3.7% in September ahead of Wednesday's Federal Reserve decision, while FXStreet reported that TD Securities expects a pause this week and a rate increase in December.
FXStreet attributed the outlook to TD Securities head of U.S. economics Oscar Munoz and U.S. economist Eli Nir. The outlet reported that they expect a further increase in March 2027. The October decision remains pending, and the later moves are forecasts.
The Fed set its benchmark rate range at 3.75% to 4.00% after a unanimous, quarter-percentage-point increase on Sept. 16. Its October meeting begins Tuesday and ends Wednesday, when the central bank is scheduled to release its decision at 2 p.m. ET.
The Fed's September meeting minutes show most policymakers anticipated that another increase would be warranted before year-end. Those discussions preceded the release of September consumer price data, and future rate choices were left dependent on incoming information. The minutes also described inflation risks as tilted upward, with several policymakers viewing higher rates as a safeguard against persistent price pressure.
The Bureau of Labor Statistics said its consumer price index rose 0.6% from August to September on a seasonally adjusted basis. The unadjusted 12-month rate rose to 3.7% from 3.4% in August. Gasoline prices increased 9.1% over the month and accounted for more than half of the overall monthly increase.
The Fed's September minutes identified lower- and moderate-income households as bearing a disproportionate burden from elevated energy costs. EconoTimes previously reported that markets favored a December rate increase over an October move.
The next consumer price report, covering October, is scheduled for Nov. 10 at 8:30 a.m. ET. The Fed's following policy meeting is set for Dec. 8-9.
