Fed officials wash away market bets on October rate increase

Two of the Federal Reserve's top policymakers this week steered financial markets away from betting on an interest rate hike during the central bank's late October policy meeting. Federal Reserve Bank of New York President John Williams and Vice Chair Philip Jefferson made a case for waiting for more data before deciding on the next steps for monetary policy.

Williams stated, "There is no need for urgency" in changing the current monetary policy setting. Jefferson echoed this view, emphasizing that any future adjustments should be based on careful examination of trends in data, evolving outlook, and the balance of risks. The Fed lifted its interest-rate target by a quarter percentage point at its mid-September policy meeting, with officials forecasting another rate hike later in the year.

However, markets now anticipate the Fed holding rates steady until the December 8-9 FOMC meeting. Other Fed officials, such as Minneapolis Fed President Neel Kashkari, also support a more measured approach to rate increases, noting that the economy has outperformed expectations and inflation might prove stickier than anticipated.