The October Fed meeting kicks off this Tuesday, October 28, and concludes on Wednesday, October 29, with the central bank's latest policy decision.
Following a recent string of lower-than-expected jobs data, the central bank resumed rate cuts at its September meeting. And while the ongoing government shutdown has delayed the release of key economic data – including the September jobs report – private data releases, such as the ADP Employment Report, underscore weakness in the labor market.
As such, it's widely expected that the Fed will reduce interest rates once again this time around.
"The Fed has indicated that it will cut rates by 25 basis points … at its October meeting," say BofA Securities economists. "We also expect the Federal Open Market Committee (FOMC) to announce an end to balance sheet runoff."
The economists believe that while the Fed will likely acknowledge that the economy remains strong, it won't adjust its outlook that downside risks to the labor market remain.
The Kiplinger team is reporting live on the October Fed meeting, bringing you the news and our expert analysis of what it could mean for the economy. Scroll for the latest updates.
Best Stocks to Buy for Fed Rate Cuts | Falling Interest Rates: What They Mean for Homeowners, Savers and Investors | Quiz: How Well Do You Know the Fed?
September CPI comes in lighter than expected
The September Consumer Price Index showed that President Donald Trump's tariff policies have had a muted impact on cost pressures – and all but guarantees the Federal Reserve will lower the federal funds rate on Wednesday afternoon.
According to the Bureau of Labor Statistics, headline CPI was up 0.3% month over month in September, slower than the 0.4% rise seen in August and the 0.4% increase economists expected.
The CPI was 3.0% higher year over year, a quicker pace than the month prior. Still, the results arrived below the 3.1% increase economists anticipated.
Gas prices were the biggest contributor to the increase in headline CPI, surging 4.1% from August to September. Food costs were also up last month, rising 0.2%.
Core CPI, which excludes volatile food and energy prices and is seen as a better measure of underlying inflation trends, rose 0.2% month over month and 3.0% year over year – coming in below August's figures and economists' forecasts.
"Inflation might not be slowing, but it's not surprising to the upside anymore," says David Russell, global head of market strategy at TradeStation. "The details are positive, with shelter and transportation services moderating. Some key parts of the basket are cooling even if tariffs nudge items like apparel higher."
Russell adds that the September CPI report keeps the Fed on track to cut rates by a quarter-percentage point at next week's meeting, and will likely have policymakers striking a more dovish stance moving forward.
While delayed from its originally scheduled October 15 reporting date, the BLS released today's data so that the Social Security Administration could calculate the cost-of-living adjustment (COLA). But with data collection services still suspended, it's unclear when we'll see the next CPI report.
- Karee Venema
Fed meeting schedule for 2025 and 2026
The next Fed meeting, which runs from October 28 to October 29, marks the seventh gathering of 2025. That means there's one more to go after that.
"The committee meets eight times a year, or about once every six weeks," writes Kiplinger contributor Dan Burrows in his feature, "When Is the Next Fed Meeting?".
The Federal Open Market Committee "is required to meet at least four times a year and may convene additional meetings if necessary," Burrows adds, noting that "the convention of meeting eight times per year dates back to the market stresses of 1981."
Fed meetings last two days and wrap up with the release of a policy decision at 2 pm Eastern Standard Time. This is typically followed by the Fed chair's press conference at 2:30 pm.
Here is the full Fed meeting schedule for 2025:
- January 28 to 29
- March 18 to 19
- May 6 to 7
- June 17 to 18
- July 29 to 30
- September 16 to 17
- October 28 to 29
- December 9 to 10
And here's the full Fed meeting schedule for 2026:
- January 27 to 28
- March 17 to 18
- April 28 to 29
- June 16 to 17
- July 28 to 29
- September 15 to 16
- October 27 to 28
- December 8 to 9
- Karee Venema
Expect more rate cuts in 2026, says BMO
The September CPI report all but locks in quarter-percentage-point rate cuts in both October and December, says Douglas Porter, chief economist at BMO Financial Group.
"Looking a bit further ahead into 2026, we suspect that the near-absence of serious tariff-related inflation sets the stage for additional cuts," the economist adds. "After all, core goods prices, the very area one would expect tariffs to affect, rose a moderate 0.2% last month and 1.5% in the past year. True, that's up from essentially no inflation in this category in the decade up to 2020, but it's not the shape-shifting pace that many analysts expected in the wake of double-digit tariffs."
Porter adds that moderating shelter inflation – it rose just 0.2% on a monthly basis in September after a 0.4% rise in August – should have headline and core inflation averaging annual increases of just below 3% next year.
As such, he's expecting an additional 75 basis points of rate cuts in 2026, bringing the federal funds rate south of 3% when all is said and done.
- Karee Venema
Wall Street shouldn't expect a half-point rate cut anytime soon
Today's mostly benign inflation report for September should make the Federal Reserve more comfortable with cutting short-term interest rates by another quarter-point at their policy meeting on October 29.
Although September employment data has not been published because of the ongoing federal government shutdown, the Fed will assume that the labor market weakness shown in the August report is continuing, which justifies a rate cut.
It seems likely that the Fed will also cut by a quarter point at its December 10 meeting before pausing. However, those who are expecting a half-point cut at either of these two meetings are likely to be disappointed.
Read more: Kiplinger Inflation Outlook: Stable for Now, but With Signs of Increasing Tariff Pressure
- David Payne
It's a big week ahead for Wall Street
Next week will be a busy one on Wall Street. In addition to the Fed meeting, market participants will also have a jam-packed earnings calendar to sift through.
Among the most notable names reporting are Alphabet (GOOGL) on Wednesday evening, and Amazon.com (AMZN) and Apple (AAPL) after Thursday's close.
"So far, Q3 results are off to a good start – S&P 500 earnings are up around 9% year over year, marking the ninth straight quarter of growth, the longest streak since 2018," says Raymond James Chief Investment Officer Larry Adam. "Plus, 82% of companies are beating EPS estimates – the best showing since Q3 2023."
Additionally, President Donald Trump is scheduled to talk with Chinese President Xi Jinping on Thursday ahead of the APEC summit in South Korea. Trade tensions between the two countries have escalated in recent weeks, though Adam notes that this appears to be posturing ahead of the November 10 trade deadline.
"Neither side wants to look weak, but neither wants a repeat of the turmoil earlier in the year," Adam says. "While it's unrealistic to expect the Trump-Xi meeting to resolve all issues, even a shift toward calmer rhetoric could help move negotiations forward."
- Karee Venema
Stocks notch new highs ahead of Fed week
The three main indexes finished at record highs on Friday. At the close, the Dow Jones Industrial Average was up 1.0% at 47,207, the S&P 500 was 0.8% higher at 6,791, and the Nasdaq Composite had gained 1.2% to 23,204.
Over in the bond market, the 2-year Treasury yield slipped 2 basis points to 3.48% and the 10-year Treasury yield ticked up 8 basis points to 3.997%, both near their lowest level of the past 12 months.
- Karee Venema
Who gets to vote at the October Fed meeting?
The Federal Open Market Committee (FOMC) has 12 total members, eight permanent and four who rotate each year.
The eight permanent voting committee members include the Fed chair and vice chair, the five Fed governors and the president of the New York Fed.
Four regional Fed presidents are rotated in each calendar year.
The 2025 FOMC voting committee consists of:
- Fed Chair Jerome Powell
- Vice Chair Philip Jefferson
- Fed Governor Michael Barr
- Fed Governor Michelle Bowman
- Fed Governor Lisa Cook
- Fed Governor Stephen Miran
- Fed Governor Christopher Waller
- New York Fed President John Williams
- Boston Fed President Susan Collins
- Chicago Fed President Austan Goolsbee
- St. Louis Fed President Alberto Musalem
- Kansas City Fed President Jeffrey Schmid
In 2026, the presidents from Cleveland, Philadelphia, Dallas and Minneapolis will rotate in as FOMC voting members, according to the Federal Reserve.
- Karee Venema
Barclays economists expect two more rate cuts in 2025 and two in 2026
Ongoing elevated downside risks to the labor market will likely encourage the Fed to cut interest rates by a quarter-percentage point on Wednesday, say Barclays economists.
The group expects Fed Governor Stephen Miran – who voted for a half-percentage-point cut in September – to dissent once again in favor of a 50 basis-point reduction.
"We expect hawks to support the cut but would not be surprised if [Kansas City Fed President Jeffrey] Schmid or [St. Louis Fed President Alberto] Musalem dissented in favor of an unchanged rate," the Barclays economists add.
And given the risks to the labor market and little change in inflation, the group is anticipating another rate cut in December and two more in 2026 – at the Fed's March and June meetings.
The economists say there's a possibility that the FOMC will announce the end of quantitative tightening, which Fed Chair Jerome Powell hinted at in a recent speech, on Wednesday afternoon, but think this is more likely to occur in December.
- Karee Venema
Will the Fed cut rates in October?
The Federal Reserve is widely expected to cut interest rates at its October 28-29 meeting as inflation holds steady and downside risks to the labor market remain.
As of October 25, CME Group FedWatch showed futures traders are pricing in a 98.3% probability the FOMC will lower the federal funds rate by 25 basis points (0.25%) to a range of 3.75% to 4.0%. This would mark its lowest level since late 2022.
- Karee Venema
Economic growth remains strong, according to S&P Global
S&P Global said Friday that "U.S. business activity growth accelerated in October to the second-fastest so far this year." This is according to its flash Purchasing Managers Index (PMI) data, with both its Services PMI and Manufacturing PMI hitting a two-month high in the initial October reading.
"Improvements in output and new work were recorded in manufacturing and services, though both sectors signaled falling exports," S&P Global stated in its report. "Factories also reported falling input buying amid a steep drop in backlogs of work and an unprecedented build-up of unsold stock."
The data also showed that employment growth improved, though the pace of job creation was "modest" and job growth was "limited by a worsening of business confidence, principally reflecting ongoing concerns over the impact of government policies."
Chris Williamson, chief business economist at S&P Global Market Intelligence, said that despite signs of continued economic growth, business confidence is deteriorating amid worries over the impact of policies, most notably tariffs.
As one example of the struggles businesses are facing, manufacturing input costs remain high due to tariffs, but companies "often reported difficulties passing higher costs on to customers in the face of subdued demand and intense competition."
- Karee Venema
How can you invest for lower interest rates?
With the Federal Reserve expected to cut rates at its two final meetings of 2025, many investors may be wondering how they can prepare their portfolios.
One way is to seek out high-quality growth stocks, which tend to see outsize benefits from lower interest rates.
This happens for two reasons, says Kiplinger contributor Charles Lewis Sizemore, CFA. For one, lower rates make capital cheaper and "young, fast-growing companies often rely on external funding."
Additionally, lower interest rates boost the current value of future profits, which increases valuations for firms with long-term earnings potential.
Read more: How to Invest for Fall Rate Cuts by the Fed
President Trump announces 10% tariffs on Canada
After calling off trade talks with Canada on Thursday night in response to a television ad featuring excerpts from one of former President Ronald Reagan's national radio addresses, President Donald Trump said he is implementing an additional 10% tariff on the country.
No other details were given in Trump's Truth Social post other than this 10% tariff will be "over and above what they are paying now."
"Just to recap," says Douglas Porter, chief economist at BMO Financial Group, "the U.S. has imposed a 50% tariff on steel and aluminum, up to 25% tariff on vehicles, a 45% tariff on lumber."
Porter adds that he expects the Bank of Canada to cut its key interest rate at its meeting this week (October 29) due to these deteriorating trade conditions.
- Karee Venema
What time will the Fed statement be released and what changes are expected?
The Federal Open Market Committee will release its updated policy statement at 2 pm Eastern Standard Time on Wednesday, October 29.
"Recent indicators suggest that growth of economic activity moderated in the first half of the year. Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated," the committee wrote in its September statement.
This time around, Deutsche Bank economists anticipate several changes based on what Fed Chair Powell had to say during his October 14 speech at the National Association for Business Economics Annual Meeting.
"Based on the data that we do have, it is fair to say that the outlook for employment and inflation does not appear to have changed much since our September meeting four weeks ago," Powell said in his speech. "Data available prior to the shutdown, however, show that growth in economic activity may be on a somewhat firmer trajectory than expected."
As such, Deutsche Bank economists "expect the Committee to tweak the first line in a slightly more hawkish direction by stating, 'Preliminary indicators suggest that growth in economic activity has firmed since the first half of the year.'"
The group believes the FOMC will leave the mention of "elevated" economic uncertainty unchanged in the second paragraph of the statement, but they expect the committee to announce the end of its balance sheet runoff program, or quantitative tightening, in the third paragraph.
- Karee Venema
How well do you know the Fed?
Fed meetings have become key events on Wall Street after inflation hit a pandemic-induced 40-year peak in 2022 – which forced the central bank into an aggressive rate-hiking campaign that lifted the federal funds rate to its highest level in more than two decades.
But how well do you know the Fed?
With the next Fed meeting on deck, we decided to test your basic knowledge of the Federal Reserve and how its actions impact you and your money.
Quiz: How Well Do You Know the Fed?
Stocks are set to start Fed week at new highs
The three main stock market indexes are all pointed higher ahead of Monday's opening bell as upbeat U.S.-China trade headlines boost sentiment.
Reports from over the weekend suggest the two countries have hashed out a framework for a trade deal ahead of this Thursday's meeting between U.S. President Donald Trump and Chinese President Xi Jinping.
"We are moving forward to the final details of the type of agreement that the leaders can review and decide if they want to conclude together,” U.S. trade representative Jamieson Greer told reporters Sunday. The negotiations included export controls and reciprocal tariff extensions.
At last check, Dow Jones Industrial Average futures were up 0.5%, the S&P 500 futures were 0.8% higher, and futures on the Nasdaq-100 jumped 1.3%. On Friday, the indexes ended the week at new record closing highs.
The bond market has it right, says Manulife John Hancock Investments strategists
Manulife John Hancock Investments Co-Chief Investment Strategists Emily Roland and Matt Miskin will be watching the 2-year Treasury yield and the U.S. dollar this Fed week.
While the strategists say there is no perfect predictor of Fed policy, the yield on the 2-year government bond note has proven to be one of the best.
The yield is currently hovering around 3.5% – near its lowest level in the past 12 months – and the strategists think a more dovish Fed could send it even lower.
"The bond market is currently pricing in 2 more cuts in 2025 and then three more in 2026," write Roland and Miskin in emailed commentary. "To us, this seems about right. They want to keep cutting to get closer to neutral, but want to save some cutting dry powder in case they need it." And the central bank still has plenty of room to ease, if needed, the pair adds.
Roland and Miskin also note that this week's Fed meeting could have big implications for the U.S. dollar. "A dovish Fed could cause the U.S. dollar to further weaken," they say.
As for the stock market, the two admit that elevated market valuations remain a concern, but "strong earnings growth, the Fed doing insurance cuts, and a potential trade deal are all positives reinforcing the recent strong global equity performance."
- Karee Venema
Bessent talks about Jerome Powell's replacement
Jerome Powell's term as Fed chair will expire on May 15, 2026. While it seemed possible earlier this year that President Trump might consider firing Powell before his term was up, this is unlikely to happen given the limited time left.
That said, we may have more solid clues as to who Jerome Powell's replacement will be by year's end.
On Monday, Treasury Secretary Scott Bessent said that the list of potential candidates to replace Powell as Fed chair has been pared down to five: current Fed Governors Christopher Waller and Michelle Bowman, National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh and BlackRock executive Rick Rieder.
Bessent is conducting interviews with the candidates and said he will send a final list to President Trump after the Thanksgiving holiday.
Earlier today, Trump told reporters that he expects to name the top pick by the end of 2025.
For what it's worth, Powell's term as a member of the Board of Governors of the Federal Reserve ends on January 31, 2028.
- Karee Venema
Fed Chair Powell and his purple ties
The odds of an October rate cut are high. It's also a safe bet that Fed Chair Powell will be wearing a purple tie during Wednesday's press conference.
That's because Powell always wears a purple tie … and there's a reason for it.
During an early April Q&A session with journalists at the Society for Advancing Business Editing and Writing conference, Powell was asked about the significance of his purple ties.
"At the beginning, the only significance was that I like purple ties," Powell replied. At his next press conference, he said he went to reach for a red or blue tie and thought, "Maybe not … so I wind up wearing purple."
He said now it's become "a thing," and it supports the fact that the Fed "is strictly non-political" and "bipartisan," and purple is a good color for that.
"Plus, I like purple ties," Powell concluded.
- Karee Venema
Where are all the Fed speakers right now?
The Fed-speak is non-existent right now. That's by design. And, setting aside arguments about correlation vs causation, markets are behaving well in the silence.
Since Saturday, October 18, and until Thursday, October 30, participants in the FOMC meeting have been bound by a Federal Reserve policy that limits the extent they can talk about the economy and interest rates.
These two-week "blackout periods" begin the second Saturday that falls 10 days before the next FOMC meeting and end the Thursday that follows the meeting. The Fed's blackout period was an unofficial practice that began in the 1980s. It was formalized in 2011 and reaffirmed in January 2025.
Fed-watchers see the policy as a measure against corruption and the potential for information leaks to distort markets. It also provides cover for open discussion during the Fed's most intense periods of policy-making.
Here is a schedule for all blackout periods through January 2027.
During the current quiet period, the S&P 500 is up 2.9%, the Dow Jones Industrial Average is 2.7% higher and the Nasdaq Composite has gained 4.0%.
- David Dittman
When is Jerome Powell speaking?
Fed Chair Powell will host a press conference at 2:30 pm Eastern Standard Time on Wednesday, October 29.
Barclays economists expect Powell to reiterate, as he did in his October 14 speech, that there has been little change in economic conditions since the central bank last met in September.
"He will likely note that growth in economic activity may be on a somewhat firmer trajectory than expected, due to AI-related investments and a resilient consumer," the group says.
However, they believe he will emphasize that "downside risks to employment remain elevated," and will "reiterate that the slower job gains reflect in part immigration restrictions and aging."
The economists also think the Fed chair will point out that weak shelter inflation helped the September CPI report come in below expectations, tariffs have increased prices on certain goods and will likely lift prices on other goods down the road.
That said, Barclays economists believe Powell will underscore the importance of keeping longer-term inflation expectations anchored and making sure that one-time price increases due to tariffs do not become "an ongoing inflation problem."
- Karee Venema
When is Trump meeting with Xi?
U.S. President Donald Trump will meet with Chinese President Xi Jinping this Thursday, October 30, while attending the APEC summit in South Korea.
"Recall that trade tensions have risen ahead of the meeting with China threatening to raise restrictions on rare earth supplies and President Trump responding with 100% tariffs on China set to begin on November 1," say Deutsche Bank economists. "Note, also, that the original trade truce negotiated last summer expires November 10."
However, Treasury Secretary Scott Bessent, following his meeting with Chinese Vice Premier He Lifeng, said that the two countries worked out "a very successful framework for the leaders to discuss on Thursday."
The negotiations reportedly included discussions on export controls, TikTok, soybean purchases and rare earths.
Bessent also said that he believes the November 10 reciprocal tariff deadline could be extended following the talks, but that decision ultimately rests with President Trump.
Still, as Deutsche Bank economists note, given the lack of economic data releases, the Trump-Xi summit is one of several substantial headline risks for market participants to contend with this week.
- Karee Venema
