Fed Rate Decision Preview: Should the Central Bank Hike or Hold?

With the Fed's rate decision less than a day away, market pricing points strongly to a pause, but not everyone agrees. This conversation with Aditav Mishra, head of US economics at BFA Global Research, examines whether the committee should hike given recent inflation data, how Chair Warsher might use the moment to end forward guidance, and where the rate path is ultimately headed.

■ The Case for a Hike
- September inflation numbers described as problematic in both headline and detail
- Logic behind getting the second hike done in October
- How a surprise move could break the market's habit of trading off FOMC guidance

■ The Market and Long-End Yields
- Views from Waller, Williams and Jefferson on waiting
- The asymmetric way the Fed talks about term premium and the 10-year
- Whether the Fed wants to delegate tightening to markets

■ Warsher's Communication Challenge
- Risk of a hawkish hold being read as complacency
- Conveying a message without offering guidance at the press conference

■ The Bigger Picture
- Expectations for roughly 75 basis points of cumulative hikes
- Inflation likely staying above target through next year and into 2028
- Favorable base effects in early 2027 and reassessment later in the year

This is suited to investors, rates traders and anyone following US monetary policy who wants a structured preview of the decision and the reasoning behind a rate-path forecast.