The Federal Reserve is expected to hold at 3.75% to 4.00% on Wednesday, a day before Q3 GDP and September inflation data. Core capital goods orders rose 0.5% against a 0.7% forecast, and Dallas Fed prices paid jumped to 55.3 with oil near $101.
Nick Timiraos estimates September CPI and PPI imply a 0.34% core PCE print, the strongest monthly reading since January and a 3.1% year-over-year rate heading into this week's FOMC hold call. Source
Markets have the FOMC holding at 3.75% to 4.00% when the meeting ends Wednesday at 2:00 p.m. ET, with Chair Kevin Warsh's press conference following at 2:30. According to CNBC, fed funds futures put the odds of a hike this week near 10% and the odds of one in December above 80%. A Reuters poll found 94 of 100 economists expecting no change. The committee has to decide before advance Q3 GDP and September Personal Consumption Expenditures (PCE) inflation and the Employment Cost Index (ECI) arrive Thursday and Friday.
