Fed Policymakers Hesitant to Raise Rates in October
US Federal Reserve policymakers John Williams and Philip Jefferson have signaled that the central bank is unlikely to raise interest rates in October. Speaking on September 29 and October 1, respectively, they emphasized the need for caution before making any further adjustments to monetary policy.
Williams, who is also vice-chair of the Federal Open Market Committee (FOMC), said there is 'no need for urgency' to change the current setting of monetary policy. He added that one more upward adjustment in the policy rate may be appropriate late in 2026.
Jefferson reinforced Williams' comments, stating that any future adjustments in policy should be determined by carefully examining trends in the data and the evolving outlook. He noted that rising bond market yields show markets are 'reassessing' the outlook, and with more data in hand, such trends may lend themselves to better discernment.
Market expectations for a rate hike in October have largely dissipated, with traders now pricing only about a 25% chance of a rate increase. Global brokerages expect the Fed to hike rates only once more in 2026, in December rather than in October.