Fed Officials Downplay Rate Hike Expectations for October Meeting

Two top Federal Reserve officials have shifted market expectations away from an interest rate increase at the central bank's late October policy meeting. Federal Reserve Bank of New York President John Williams and Vice Chair Philip Jefferson both emphasized that there is no need for urgency in changing monetary policy, suggesting that more data will be needed before making a decision.

Williams, who also serves as vice chair of the Fed's rate-setting Federal Open Market Committee, stated that 'there is no need for urgency' on changing current monetary policy settings. Jefferson echoed this view, saying that any future adjustments in policy should be determined by carefully examining trends in data and the evolving outlook.

This shift in sentiment has led global brokerages to largely expect the Fed to hike rates only once more this year, in December rather than October. The joint message from Williams and Jefferson is seen as authoritative, particularly given the lack of forward guidance from Fed Chairman Kevin Warsh.