The Federal Reserve is in a tricky spot these days as the group approaches its next meeting.
On the one hand, inflation remains above the central bank's long-term target and price pressures could resurface as a result of President Donald Trump's tariff policies.
On the other hand, the jobs outlook is weakening and too many folks are priced out of the housing market. And the temporary dearth of official statistics due to the government shutdown only complicates matters for policymakers ahead of the next Fed meeting.
Happily, the central bank's Federal Open Market Committee (FOMC) isn't flying totally blind heading into the next Fed meeting, experts say, and lower borrowing costs are on the way.
"Despite the drought of official public data, ongoing reports from private-sector sources should provide the FOMC with sufficient information to make a semi-informed decision," writes Sal Guatieri, senior economist at BMO Capital Markets. "Barring a particularly bad CPI release on October 24, or a sharp improvement in some labor market indicators, there's little reason for the FOMC not to continue normalizing policy by trimming rates again."
The bottom line? When you consider the Fed's dual mandate against the backdrop of sticky inflation and a softening labor market, it makes sense that folks are obsessed with tracking when the next Fed meeting is coming up.
After all, lower interest rates today equal higher returns for equities tomorrow.
The next Fed meeting: What to expect
For the record, the central bank's rate-setting committee is called the Federal Open Market Committee.
As you can see from the FOMC meeting calendar below, the committee meets eight times a year, or about once every six weeks. The FOMC is required to meet at least four times a year and may convene additional meetings if necessary. The convention of meeting eight times per year dates back to the market stresses of 1981.
FOMC meetings last two days and conclude with the committee releasing its policy decision at 2 pm Eastern time. The Fed chief then holds a press conference at 2:30 pm. (Pro tip: as closely scrutinized as the Fed statement might be, market participants are usually even more keen on what the Fed chair has to say in the press conference.)
As for the next Fed meeting, it will begin on Tuesday, October 28, and conclude with a policy statement on Wednesday, October 29, at 2 pm Eastern.
A quarter-point cut is by far and away the betting favorite.
As of October 21, interest rate traders assigned a 97% probability to the FOMC trimming the fed funds rate by 25 basis points (0.25%) to a target range of 3.75% to 4.0%, according to CME FedWatch. That's up from 92% a month ago. The odds of rates remaining unchanged stood at 3%, down from 8% last month.
"After two years of inflation-focused vigilance, the Fed is beginning to look forward, recognizing that the price stability battle has largely been won and that new challenges are emerging on the employment and housing affordability fronts," notes Russ Brownback, BlackRock's deputy chief investment officer of global fixed income.
The schedule of upcoming Fed meetings is listed below, courtesy of the FOMC.
October 28-29 |
December 9-10 |
January 27-28 |
March 17-18 |
April 28-29 |
June 16-17 |
July 28-29 |
September 15-16 |
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