Fed meeting today: Live updates

In its post-meeting statement, the Fed indicated it will need more data to guide its next steps on policy.

“Inflation remains elevated,” the Fed said in its post-meeting statement.

“The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal. The Committee will deliver price stability.”

—Darla Mercado

Central bank policymakers opted to hold rates at their current target range of 3.75% to 4%, a move that traders largely expected.

Two members of the Federal Open Market Committee dissented from the decision: Governor Lisa Cook and Cleveland Fed President Beth Hammack were in favor of raising rates by a quarter percentage point.

Read more from CNBC’s Jeff Cox on the Fed’s decision.

—Darla Mercado

The three major averages were mixed as the Federal Reserve’s rate decision approached.

As of 1:40 p.m. ET, the S&P 500 was up 0.2%, while the Dow Industrials gained 135 points, or 0.3%, on the day. The Nasdaq Composite traded near the flatline.

The U.S. 10-year Treasury yield was up more than 2 basis points at 5.02%, while the 2-year yield gained almost 3 basis points to 4.766%.

—Darla Mercado

If the Fed waits until December to lift rates, it would “just be prolonging our agony,” said Steven Wieting, co-founder of the CIO Group.

Fed funds futures traders are largely expecting the central bank to keep rates unchanged on Wednesday and then raise them in December. Traders are placing just around 7% likelihood of a 25 basis point hike on Wednesday, according to CME’s FedWatch tool.

But Wieting told CNBC on Wednesday that there’s a chance that central bank policymakers may not hold off after Fed Chairman Kevin Warsh has signaled that inflation remains too high. He said raising rates now “may be better” than not doing so until December.

“I’m not predicting action today,” Wieting said. “But the chance that they actually shock us now is above 7%.”

— Alex Harring

While the Federal Reserve is largely expected to stand pat on its key interest rate on Wednesday, consumer rates have edged higher since policymakers pushed through their first hike last month.

The average 30-year fixed rate mortgage now sits at 7.33%, up from 7.12% last month, according to MND. Mortgage rates are closely tied to movement in the 10-year Treasury yield, which is now just below 5%.

The cost of borrowing against the equity in your dwelling – a home equity loan – has also risen and is now at 8.77%, versus 8.28% in September, according to Bankrate.

Savers have seen some marginal gains in the past month since the Fed lifted its rate by a quarter percentage point in September. The average money market annual yield is now at 0.45%, up one basis point from last month, according to Haver. The annual percentage yield on a five-year certificate of deposit is at 1.83%, up eight basis points from September, per Haver.

—Darla Mercado, Nick Wells

Fed funds futures traders now widely expect the central bank to keep rates unchanged today. But that wasn’t always the case.

Futures indicate a nearly 93% likelihood that rates are holding steady, according to the latest data from CME’s FedWatch tool. A month earlier, traders were forecasting a less than 30% probability of rates staying unchanged.

The market adjusted expectations as Fed officials signaled that the central bank can take its time before making another move.

New York Fed President John Williams said “there is no need for urgency” after its September hike, which was the central bank’s first in three years.

Philip Jefferson, the Fed’s vice chair, said members of the central bank would “need to come to our own judgment, which may take more time.” Jefferson noted that yields increased following the Fed’s September decision, indicating that investors are watching macroeconomic shifts.

— Alex Harring

The Federal Reserve’s decision to raise rates at its last meeting boosted borrowing costs, and the expectation that more rate increases are in the pipeline means consumers are unlikely to see much relief anytime soon. Those elevated borrowing costs are adding to existing affordability challenges, particularly for lower- and middle-income consumers.

As long as the Federal Reserve keeps rates at the current target range of 3.75% to 4%, consumers are unlikely to see much relief. Elevated borrowing costs are adding to existing affordability challenges, particularly for lower- and middle-income consumers.

Higher rates continue to affect credit cards, auto loans and mortgages. Credit card rates have climbed to their highest levels since late 2025, while 30-year mortgage rates have remained above 7%, making homeownership less affordable. Auto loan rates have also stayed near 7%, with even higher rates common in the used-car market.

One bright spot is savings. High-yield savings accounts continue to offer relatively strong returns compared with traditional bank accounts.

Some experts suggest consumers can ease budget pressures by paying down high-interest debt, negotiating better loan terms and taking advantage of higher yields on savings.

—Jessica Dickler

The Fed’s big problem today is explaining why it’s holding rates steady when the inflation rate has worsened since its last meeting – and several indicators suggest more bad numbers to come.

Start with tomorrow’s PCE price index, the Fed’s preferred inflation indicator. Both Wall Street and the Fed are able to use the CPI and PPI to pretty much peg the change in the PCE. The headline is expected to rise 0.5% for September, which will boost the year-over-year rate to 3.7% from 3.4%. The Fed could look past that, assuming it’s driven by the continued rise in energy prices. But the core rate is seen rising 0.3%, raising the annual rate by a tenth to 3.1%.

What about the much-touted three-month annualized rate, which many doves have promoted as showing that inflation is under control? It fell to 2.05% last month, almost spot on with the Fed’s 2% target. Time to cut, right? Not so fast. Model in a 0.3% rise in the core and the 3-month annualized rate shoots up to 2.7%. The Cleveland Fed’s inflation nowcasting gauge sees core PCE in October running at 0.25%. Model that number in and the three-month annualized rate would rise to 3.24% in October. The takeaway: the gauge is so volatile that it serves as a poor guide for monetary policy.

The Cleveland Fed’s trimmed mean, which removes extreme price changes from the CPI, has hovered between 2.6% and 2.7% for most of this year, showing little change. The Dallas Fed’s trimmed mean has stood mostly alone in supporting a dovish take on inflation at 2.2%. It’s worth noting, however, the Dallas Fed President Lorie Logan has herself cautioned that the measure may do too extreme a job of trimming away inflation.

Another problem the Fed faces: a seasonal pattern of inflation spiking up at the beginning of the year. Goldman Sachs sees inflation easing next year as pressures from tariffs, the AI buildout and energy abate. But it worries, “companies could take the opportunity provided by start-of-the-year price increases to pass along their higher costs, resulting in a larger ‘January effect.’ “

The danger of a hold today amid current inflationary pressures is that the Fed may need to do more in coming months. TD Securities writes: “It only takes one notably bad inflation report and/or a collection of strong labor market data for the market to start pricing larger odds of a 50bp rate increase in upcoming meetings.”

—Steve Liesman

Markets were taking a cautious approach ahead of the Fed rate decision, with major indexes mostly positive and Treasury yields also higher.

The Dow Jones Industrial Average is up less than 100 points, while the S&P 500 and the Nasdaq were around the flatine.

In the fixed income market, the benchmark 10-year note added about 3.6 basis points to yield 5.03%, while the 2-year note added 3.7 basis points to 4.774%.

Since Kevin Warsh took over as Fed chairman in May, stocks have generally fallen on Fed meeting days, then posted gains the day after, according to DataTrek Research cofounder Nicholas Colas. The S&P 500 in particular has rallied at least 1% on the three post-meeting days of Warsh’s tenure.

—Jeff Cox

The Fed’s decision Wednesday follows a string of reports indicating that inflation is reaccelerating.

September’s consumer price index showed annual inflation ticked up to 3.7%, driven by higher energy costs. The CPI is currently on one of its longest streaks of annual readings above 2% on record.

The producer price index rose to 6.3% year over year in September. It was the steepest 12-month increase since 2022 for the index, which acts as a gauge of inflation on wholesalers.

The Fed won’t get the latest from its preferred inflation reading, the personal consumption expenditures price index, until the September number is released Thursday morning. Wall Street economists use CPI and PPI use to estimate PCE, and they expect it to rise as well.

— Alex Harring

The Federal Reserve is following a different reaction function as it sets monetary policy, according to Stephen Miran, a former chair of the Council of Economic Advisers and governor at the central bank.

“There’s a completely new reaction function in town,” Miran said Tuesday on CNBC’s “Squawk Box.”

That new reaction function is “leading them to forecast additional hikes,” said Miran, who’s now senior strategist at Hudson Bay Capital.

Fed meeting minutes from the September gathering showed officials anticipated another increase, but did not signal when. Fed funds futures traders are anticipating the central bank holds rates steady on Wednesday before raising them in December, according to CME’s FedWatch tool.

Miran said inflation expectations in financial markets have been “cool as a cucumber” about hitting the Fed’s inflation target. He said no one was willing to bet that the Fed was not committed to getting inflation to its 2% target.

— Alex Harring

Goldman Sachs economists think Fed watchers may be disappointed if they expect any major revelations from Warsh. The firm thinks the Fed has decided to take an every-other-meeting approach to hiking, and Warsh, who disdains providing forward guidance on policy, isn’t likely to offer much new insight.

“We do not expect significant new information from the press conference,” Goldman economist David Mericle said in a note. “The seemingly strong support for hiking every other meeting means there is likely a high bar to deviate from that plan through the end of the year, which should limit the impact of Fed communication for now.”

Moreover, “even if the FOMC decides to change course in the future and wants to communicate this to markets, Warsh’s decision not to hint at the slower pace at his September press conference suggests he might prefer to again leave that to others,” Mericle added.

—Jeff Cox

Warsh has some explaining to do when it comes to the difference between the Fed’s stance in September and October, according to Michael Feroli, chief U.S. economist at JPMorgan Chase.

The Federal Open Market Committee chose to raise its key interest rate by a quarter percentage point last month after its preferred inflation measure, the personal consumption expenditures price index, posted a 0.2% core increase for August.

With the measure on track to rise 0.3% in September, Feroli wonders why the Fed isn’t hiking again.

“Chair Warsh will have to explain why the committee hiked after a two-tenths core PCE print in September but is now holding after an expected three-tenths outturn. Disallowing follow-up questions won’t resolve the challenge,” he said in a note. “A decision to leave rates unchanged less than a week before the midterm elections that goes unexplained would only encourage thoughts that policy is being driven by considerations other than employment and inflation.”

—Jeff Cox