Fed Expected to Hold Rates at 3.75%-4% as Inflation Hits 3.7% Before Midterms

The Federal Reserve is expected to leave its benchmark interest rate unchanged at 3.75% to 4% when it announces its decision at 2 p.m. ET on Wednesday, days before the U.S. midterm elections. The Fed raised the rate by a quarter of a percentage point in September, its first hike in about three years. Consumer prices rose at a 3.7% annual rate in September as energy costs jumped, and core inflation, which excludes volatile energy categories, rose 2.6%. The Fed targets 2%. The Labor Department said gasoline, above $4 a gallon for three months, accounted for more than half of September's increase. CNBC reported that oil prices tied to the U.S. war with Iran also pushed up producer prices, and Brent crude hit a five-month high Friday. CME FedWatch futures priced less than a 10% chance of another hike this week, while nearly 75% expect at least one by year-end. The European Central Bank and Bank of Japan are also expected to hold rates.

Left-leaning CBS News frames the story as a question about whether the Fed will hike. It leads with the Wednesday decision, the inflation figures and the gasoline data. It quotes Capital Economics' Thomas Ryan, who says officials still intend to tighten at a measured pace. Alternative outlets add other angles. CNBC focuses on consumers, citing Iran-war oil prices and Navy Federal Credit Union's Heather Long, who warns of high borrowing costs and says a pre-election hike is unlikely. Semafor places the Fed among global central bank decisions and Big Tech earnings, and says elections could revive Middle East conflict. Both left and alternative coverage expect a hold and cite 3.7% inflation. Right-leaning outlets had not reported this story at the time of writing, while left-leaning and alternative outlets had.