A hold at 3.75% to 4.00% is the base case today, which leaves dissents and statement wording to carry the message. Core PCE is forecast at 3.1% on Thursday, after producer prices jumped 1.3% in September.
Nick Timiraos estimates September CPI and PPI imply core PCE of about 0.34%, the strongest monthly reading since January and enough to lift the 12-month rate to 3.1%. Source
The Federal Open Market Committee (FOMC) announces its decision at 2:00 p.m. ET, and Chair Kevin Warsh takes questions at 2:30. The target range is 3.75% to 4.00% after the September 16 quarter-point hike. An early Wednesday snapshot put a hold near 92% and a hike near 8%. That is the rate call, and it is the easy part. The harder question is how the committee communicates when its chair has chosen to say less.
