Six days before the US elections: what will the Fed do in its upcoming decision?

The Federal Reserve is expected to leave interest rates unchanged at 3.75%-4% on Wednesday, six days before the US midterm elections. Annual inflation rose to 3.7%, but market consensus favors a hold, with a 73% probability of a rate hike in December. Fed Chair Worch, appointed by Trump, led the September increase.

The US central bank, the Federal Reserve, is expected to leave interest rates unchanged at 3.75%-4% on Wednesday, six days before the US midterm elections. This is despite annual inflation rising to 3.7% in September, far from the 2% target, and a month and a half after the first rate hike since 2023. Market consensus is that rates will remain unchanged, but futures indicate about a 73% chance of a hike in December. Fed Chair Kevin Worch, appointed by President Trump, led the September increase. Against this backdrop, the midterm elections are centered on the cost of living, with 85% of voters defining the economy as an important issue. The article also reviews the impact on Israel: the Bank of Israel left its rate at 3.25% last week, and economists are divided on whether Fed decisions will affect local monetary policy.