The Federal Reserve will announce its rate decision at 2:00 PM ET, followed by Chair Powell’s press conference at 2:30 PM ET. The Fed is widely expected to deliver a 25-basis-point rate cut, but with a hawkish tilt. That stance reflects lingering uncertainty in the data — uncertainty that should begin to resolve next week as key reports on inflation and employment finally catch up after the government shutdown delays.
Today’s release will also include updated central tendency projections from Fed officials for the Fed Funds rate, GDP growth, unemployment, PCE inflation, and core PCE inflation. In September, policymakers projected:
Fed Funds rate: 3.4% (today’s projection expected closer to 3.75%)
GDP: 1.8%
Unemployment: 4.4%
PCE inflation: 2.6%
Core PCE inflation: 2.6%
Chair Powell’s press conference will follow at 2:30 PM ET and typically runs 50–60 minutes, providing additional clarity on how the Fed is thinking about the balance of risks and the path ahead.
In the video above, I walk through the key technical levels for three major FX pairs — EURUSD, USDJPY, and GBPUSD — to help set up the trading day.
What else for today?
The Bank of Canada will announce their rate decision. The expectation is for the central bank to keep rates unchanged at 2.25%. What traders will be focused on is the tone from the central bank after stronger jobs data over the last few months. Will Macklem and the statement move in that direction, or will the central bank keep the door open for disappointment to emerge from the recent uptick?
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At 8:30 AM ET, the employment cost index for the 3rd quarter in the US will be released with expectations of 0.9%. That equals the gains from the 2nd quarter, and would be the 4th straight quarter of 0.9%. That sounds good with wages keeping up with inflation, but the mix may tell a different story with the higher income earnings benefiting the most.
Earlier today, the US mortgage data for the current week was released with mortgage applications rising by 4.8% after a -1.4% decline. The mortgage rates remained fairly steady at 6.33% versus 6.32% last week.
Markets
US stocks are lower in premarket trading with the futures are implying:
- Dow industrial average -5.69 points
- S&P index -1.76 points
- NASDAQ index -32.19 points
Looking at the US debt market to start the US session, yields are continuing to push higher with the 10 year now above 4.20%. Recall it reached a low near 3.96% a few weeks ago.
- 2-year yield 3.625%, +1.2 basis points
- 5 year yield 3.804%, +2.4 basis points
- 10 year yield 4.203%, +1.7 basis points
- 30 year yield 4.820%, +1.1 basis points.
In other related markets:
- Crude oil is trading up $0.15 at $58.40.
- Gold is trading down $11.80 at $4195.06
- Silver is continuing its record run with a gain of $0.46 to $61.15 (a new record high of $61.60 was reached today)
- Bitcoin is trading down $600 at $92,039
