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Fed starts two-day policy meeting as odds split on rates
CME FedWatch showed bond traders pricing a 68.5% chance of no change and a 31.5% chance of a hike ahead of the Wednesday decision.
The Federal Reserve began its two-day policy meeting on Tuesday, with the interest rate decision set for 2:00 p.m. ET on Wednesday, according to Yahoo Finance. Market pricing is currently split on what the Fed will do, with bond traders assigning 68.5% odds to keeping rates steady and 31.5% odds to a rate hike, as reflected in CME Group's FedWatch.
Yahoo Finance said the outlook hinges on a balance of forces, including potential inflationary pressure tied to the war in Iran and supply constraints linked to AI-related bottlenecks. It also noted that the decision could be shaped by the Fed's approach under new Chairman Kevin Warsh.
As Warsh reforms the institution, Yahoo Finance said he is aiming for less communication with markets along the policy path, and the Fed's decision is described as intentionally harder to read. The outlet added that officials remain divided on whether to hike at all this year.