The Federal Reserve was due to announce its October rate decision Wednesday, with investors watching how recent price increases may affect expectations for borrowing costs across the economy.
The Associated Press, Euronews and Axios reported that markets expected the Fed to maintain its target range of 3.75% to 4%. The Fed's calendar listed the policy statement for 2 p.m. ET (18:00 UTC), followed by a news conference with Fed Chair Kevin Warsh at 2:30 p.m. ET (18:30 UTC).
At its Sept. 16 meeting, the Federal Open Market Committee (FOMC), the Fed's policy-setting body, voted 12-0 to raise its benchmark range by 25 basis points, to 3.75% to 4%.
The U.S. Bureau of Labor Statistics (BLS) said the Consumer Price Index (CPI) rose 0.6% in September from August on a seasonally adjusted basis. Prices were up 3.7% from a year earlier, compared with 3.4% in August. Gasoline prices climbed 9.1% during September, and the energy index increased 5.2%. Core CPI, which excludes food and energy, was up 2.6% over the year.
The Associated Press and Euronews linked recent oil and gas price increases to the Iran war. The BLS recorded a 1.3% seasonally adjusted monthly increase in its final-demand Producer Price Index in September; the index was 6.3% above its year-earlier level.
The Associated Press reported that higher mortgage rates have made homebuying less affordable. Investors are also watching Warsh's remarks for clues about the December meeting, AP and Euronews reported. The Fed has scheduled that meeting for Dec. 8-9, but a rate increase is a market expectation, not an announced Fed decision.
The U.S. Bureau of Economic Analysis (BEA) scheduled its September personal income and outlays report, including the PCE price index, and its advance estimate of third-quarter GDP for Thursday, Oct. 29, at 8:30 a.m. ET (12:30 UTC). The Associated Press reported economist forecasts of 3.6% annual headline PCE inflation and 3.1% core inflation for September. Those figures were forecasts, not released results.
