Kevin Warsh, chairman of the US Federal Reserve, during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, DC, US, on Wednesday, Sept. 16, 2026.
Daniel Heuer | Bloomberg | Getty Images
The Federal Reserve’s interest rate decision Wednesday likely will be short on suspense, with markets expecting the central bank to stay on hold even with inflation tracking well above target.
Markets are pricing in less than a 10% chance that the rate-setting Federal Open Market Committee follows up its quarter-percentage-point hike in September with another increase, according to the CME Group’s FedWatch tool.
Assuming that sentiment is correct, it will leave the Fed’s benchmark interest rate in a range between 3.75% and 4% — and shift investor attention to Fed Chairman Kevin Warsh and whatever clues he chooses to provide in his post-meeting news conference.
Traders expect the Fed to follow up the October skip with a hike at its next meeting in December.
With no updates to the Fed’s “dot plot” of rate forecasts or the Summary of Economic Projections on tap for this meeting, there will be less detail about where officials see current conditions and the future path of monetary policy.
Some observers do think there could be dissents from the decision to hold. Regional Presidents Beth Hammack of Cleveland and Lorie Logan of Dallas are potential no votes, as is Neel Kashkari of Minneapolis. Each chose to vote against a hold in July.
The Fed decision comes less than a week before a pivotal midterm election in which the balance of power in Congress is up for grabs. While Fed officials insist that political considerations play no part in their decisions, some economists have speculated that officials would prefer to steer away from increasing rates so close to an election.
Goldman expects Warsh may come up short on guidance
Goldman Sachs economists think Fed watchers may be disappointed if they expect any major revelations from Warsh. The firm thinks the Fed has decided to take an every-other-meeting approach to hiking, and Warsh, who disdains providing forward guidance on policy, isn’t likely to offer much new insight.
“We do not expect significant new information from the press conference,” Goldman economist David Mericle said in a note. “The seemingly strong support for hiking every other meeting means there is likely a high bar to deviate from that plan through the end of the year, which should limit the impact of Fed communication for now.”
Moreover, “even if the FOMC decides to change course in the future and wants to communicate this to markets, Warsh’s decision not to hint at the slower pace at his September press conference suggests he might prefer to again leave that to others,” Mericle added.
—Jeff Cox
Economist Michael Feroli has some questions for Fed chair
Warsh has some explaining to do when it comes to the difference between the Fed’s stance in September and October, according to Michael Feroli, chief U.S. economist at JPMorgan Chase.
The Federal Open Market Committee chose to raise its key interest rate by a quarter percentage point last month after its preferred inflation measure, the personal consumption expenditures price index, posted a 0.2% core increase for August.
With the measure on track to rise 0.3% in September, Feroli wonders why the Fed isn’t hiking again.
“Chair Warsh will have to explain why the committee hiked after a two-tenths core PCE print in September but is now holding after an expected three-tenths outturn. Disallowing follow-up questions won’t resolve the challenge,” he said in a note. “A decision to leave rates unchanged less than a week before the midterm elections that goes unexplained would only encourage thoughts that policy is being driven by considerations other than employment and inflation.”
—Jeff Cox