5 things to watch for in this week's Federal Reserve meeting
Summary
The Federal Reserve is expected to leave its key interest rate unchanged after its Oct. 27–28 meeting, though investors are watching for clues about inflation and future policy. The meeting comes amid high consumer and mortgage costs, shortly before midterm elections, and ongoing questions about Fed Chair Kevin Warsh’s approach to rate guidance and independence from President Donald Trump.Key Facts
- The Fed’s key interest rate is about 3.9%, and futures markets indicate investors see almost no chance of a rate increase at this meeting.
- Some investors and economists had expected a quarter-point increase after inflation came in hotter than expected the previous month.
- Fed officials, including Vice Chair Philip Jefferson, have said longer-term interest rates have risen and that officials need time to assess their decisions.
- Warsh has criticized forward guidance, which means giving markets clear signals about likely future rate decisions.
- The average 30-year mortgage rate reached 7.4% earlier in October and later eased to 7.32%; it was just under 6.2% a year earlier.
- Oxford Economics estimates that this year’s mortgage-rate increases have put home buying out of reach for an additional 5 million households.
- The meeting is six days before the midterm elections, which the article says have been shaped by affordability concerns.
- The article says Warsh raised rates at the Fed’s September meeting despite Trump’s preference for lower rates.
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