Economists Warn: Market Severely Underestimating Uncertainty of Federal Reserve Rate Hike in October
According to Wallstreetcn, despite the futures market currently assigning only a 17% probability to a Federal Reserve rate hike in October, several economists believe the Federal Open Market Committee (FOMC) meeting on October 27-28 is far more uncertain than market pricing suggests. Ethan Harris, former Chief Economist at Bank of America Securities, explicitly stated it's a "50/50" chance, while Matthew Martin, US Economist at Oxford Economics, even predicted the Fed would hike rates consecutively in October and December. The core driver behind the upward revision of rate hike expectations is the stronger-than-expected US inflation data for September, with consumer prices rising 3.7% year-over-year, the Producer Price Index (PPI) wholesale inflation reaching 6.3%, and prices of goods excluding energy accelerating upward. Federal Reserve Chairman Warsh deliberately maintained neutrality before the blackout period, refusing to prejudge the meeting's outcome, further complicating market interpretation. An unexpected rate hike in October would significantly impact US Treasury yields, the dollar, and risk assets.
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Disclaimer: This content reflects the author's personal views only and does not constitute investment advice.
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