Warsh Gives No Hint on October as Odds of a Fed Hike Fall to 15%
The Fed chair spoke at the IMF meetings in Bangkok, and markets cut the odds of another rate increase this month.
Kevin Warsh, chair of the U.S. Federal Reserve, gave no hint on Friday, Oct. 16, 2026, of what the central bank will do at its Oct. 27-28 meeting. He spoke in Bangkok at the annual meetings of the International Monetary Fund (IMF) and the World Bank, in a conversation with IMF Managing Director Kristalina Georgieva.
Warsh said, according to El Financiero, citing Bloomberg, that he does not anticipate decisions about upcoming meetings. He added that the Fed "removed a dose of accommodation about a month ago," a reference to the September hike, the first rate increase since 2023. Reuters carries the original English quote.
After his remarks, markets cut their bets on another hike. The CME Group's FedWatch tool, which derives probabilities from interest-rate futures, shows about a 15% chance of a quarter-point increase in October, against 48% a month ago, according to El Español. The probability that rates stay unchanged rose to 85%, from 72% before his remarks.
Bloomberg offered a different reading: the chance of a hike would have fallen from about 27% to below 15%. No source published a cutoff time for its figures, and these probabilities shift hour by hour.
Goldman Sachs expects the Fed to pause in October and raise rates again in December, according to Bloomberg. U.S. annual inflation was 3.7% in September, three-tenths of a point higher than in August, according to El Español.
A Fed less inclined to raise rates eases the pressure that the rate gap with Mexico puts on the peso, which closed Oct. 16 at 18.48 per dollar after six weeks of losses, according to Reuters. The Fed will announce its decision at the end of the Oct. 27-28 meeting.
