Traders and economists overwhelmingly expect the Federal Reserve to leave its benchmark interest rate unchanged at 3.75% to 4.00% on Oct 28, days before the Nov 3 US midterm elections, shifting expectations for the next 25 basis point increase to December. A poll of 100 economists showed 94 forecasting a pause this week and six predicting a move to 4.00% to 4.25%, while Goldman Sachs also projected an October hold followed by a quarter-point hike in December. Interest rate futures price a 90.6% probability of no change and Kalshi puts the odds of a hold at 93%, a sharp reversal from Oct 14 when hike probabilities reached 55% immediately after September consumer inflation accelerated to 3.7%.

Market pricing for a back-to-back increase retreated after at least five Fed officials signaled a lack of urgency to act at consecutive meetings following September’s rate hike, while Chair Kevin Warsh declined to endorse an October move during an International Monetary Fund appearance in Bangkok. “I don’t prejudge meetings,” Warsh said of offering forward guidance. “It’s a new chapter at the Fed, and we’re not in that business anymore.” Before the pre-meeting quiet period, Governors Michelle Bowman and San Francisco Fed President Mary Daly both said they saw no need for urgency, and Chicago Fed President Austan Goolsbee favored waiting for more data despite calling the September inflation report “discouraging” and warning that artificial intelligence data center investment risked short-run overheating.