Fed October hike odds fall to 49.4% after soft data and dovish comments

  • Markets cut October Federal Reserve hike expectations after weak labor data and dovish comments.
  • 49.4% was the October hike probability, down from 74.6% one day earlier.
  • August PCE data and September payrolls were due to influence rate expectations.

Markets sharply reduced expectations for a Federal Reserve interest-rate increase in October after softer labor data and dovish comments from New York Fed President John Williams. CME FedWatch showed a 49.4% chance of a hike to 4.25%, down from 74.6% a day earlier, while the probability of a hold rose to 50.6% from 25.4%. Williams said there was "no need for urgency" and that the central bank needed only one more increase this year to curb inflation, after raising rates by 25 basis points to 4.0% in September. Weaker JOLTS job openings and consumer-confidence data also reduced the perceived scope for further tightening. Investors are awaiting August PCE price data, the Fed's preferred inflation measure, and September nonfarm payrolls for further signals.

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Fed October hike odds fall to 49.4% after soft data and dovish comments - CoinPost Terminal