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Fed Officials Signal October Rate Hike Unlikely, Markets Adjust Expectations
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CNBC TV18•02-10-2026, 07:53
Fed Officials Signal October Rate Hike Unlikely, Markets Adjust Expectations
- •Top Federal Reserve policymakers, John Williams and Philip Jefferson, indicated no urgency for an immediate interest rate hike, leading markets to largely abandon bets on an October increase.
- •Williams and Jefferson emphasized the need to carefully examine trends in data, the evolving outlook, and the balance of risks before making future policy adjustments.
- •Traders now price only about a 25% chance of a rate hike this month, a significant drop from 70% earlier in the week, with global brokerages largely expecting a hike in December instead.
- •Dallas Fed President Lorie Logan suggested that at least another half of a percentage point of rate hikes would be needed to achieve the Fed's 2% inflation goal, but did not specify timing.
- •Minneapolis Fed President Neel Kashkari, a policy hawk, also stated he doesn't have a strong view on the timing of the next hike, forecasting one more hike this year and another next year.
Key Questions Answered
Top policymakers including NY Fed President John Williams and Vice Chair Philip Jefferson signaled that there is no urgency for an immediate rate increase and that more time is needed to examine economic data.
August data showed a 3.4% year-over-year increase in the personal consumption expenditures price index, which remains significantly above the Federal Reserve's 2% goal but matches the rate seen in July.
Global brokerages now largely expect the Federal Reserve to raise rates once more this year in December rather than in October, aligning with forecasts from policymakers like Neel Kashkari.
