Federal Reserve expected to pause rate hikes despite elevated inflation metrics

The Federal Reserve is widely expected to hold interest rates steady at its policy meeting on October 28, Yahoo Finance reported. Central bank officials face hotter inflation data just days before the United States midterm elections. Former Federal Reserve vice chair Alan Blinder said he expects a hawkish pause from policymakers. [1][2][3]

Blinder stated that current market conditions call for clear forward guidance that strongly hints the central bank stands ready to raise interest rates again. He added that the Federal Reserve could hint that its next meeting might bring another rate increase, even though Federal Reserve Chairman Kevin Warsh generally avoids telegraphing future policy moves. [1]

The upcoming interest rate decision follows accelerating inflation figures. As FTMQ Real Estate reported earlier, the United States Consumer Price Index increased to 3.7 percent year-over-year in September from 3.4 percent in August. Core Consumer Price Index rose to 2.6 percent year-over-year in September, up from 2.4 percent in August. [3]

Prior to the meeting, borrowing costs and bond yields showed mixed movements. As FTMQ Real Estate reported earlier, average United States mortgage rates eased to 7.41 percent. Meanwhile, the 10-year Treasury note yield dipped to 5.113 percent, while the 2-year Treasury note yield rose to 4.797 percent. [2]