UPDATE: October Fed rate hike odds drop to 50% following comments from John Williams
CIE News ·
Market expectations for an October Fed rate hike fell to around 50% from 70.9% following remarks by New York Fed President John Williams indicating no urgency for immediate action.
As previously reported, Federal Reserve Governor Michael Barr reaffirmed a hawkish outlook calling for further rate hikes to tackle inflation. According to crypto.news, market expectations for a rate increase at the October 27–28 policy meeting quickly declined following separate remarks by New York Fed President John Williams on September 29. CME FedWatch data indicated that the probability of an October quarter-point rate hike fell to roughly 49.3% to 50%, down from 70.9% earlier in the week.
Speaking at the University at Buffalo, Williams stated that there is no urgency to adjust rates immediately after the central bank's September increase to a 3.75%–4% range, businesstimes.com.sg reported. Williams noted that while one additional rate hike later in the year remained his baseline projection, officials have time to evaluate incoming economic data before acting. He projected inflation to finish the year near 3.5% and move toward the 2% goal by 2028.
The diverging views between Williams' patient stance and Barr's push for timely policy tightening have created mixed signals for financial markets, crypto.news reported. While Barr cited persistent risks from energy costs and artificial intelligence investments, Williams indicated that price pressures from trade tariffs have largely abated and energy price surges may level off.