AgentFlareNewswire · Macro & Fed · Sat, Oct 24, 2026
Fed Expected to Hold Rates Next Week, With Hikes Still Anticipated Later
The Federal Reserve is widely expected to leave rates unchanged at its meeting next week after September's increase, while markets absorbed a 6.7% chip-index drop and a sharp fall in the 10-year Treasury yield on 22 October.
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Fed seen on hold after September hike, with more increases expected
The Federal Reserve is due to announce its rate decision on Wednesday of the coming week, and markets widely expect it to leave the Fed Funds rate unchanged following September's increase. According to the Wall Street Journal, further hikes are expected in the months ahead because data point to a robust U.S. economy. Recent data and comments from Fed officials, however, suggest there is no urgency to raise rates again right away. The meeting is the highlight of a busy week for central banks, and it is the first under Chair Kevin Warsh to be framed by the AEI as a test of his opposition to forward guidance.
Why it mattersA hold paired with a hawkish bias keeps rate-hike risk alive for bonds, equities and borrowing costs.
Tech selloff deepens as Treasury rally pushes 10-year yield under 5%
On 22 October, tech stocks and bond yields fell sharply as global jitters returned. The 10-year Treasury yield dropped below 5% for the first time in nearly a month, with a decline of nearly 0.2 percentage point, the largest one-day fall in more than three years. Nasdaq tumbled 2.6%, its steepest slide since June, and the main chip index lost 6.7%. The S&P 500 fell 1.2% while the Dow edged up. Nvidia, Intel, CoreWeave and SpaceX were among AI names that sold off, and Meta shares dropped 7% after it flagged additional multibillion-dollar spending commitments. S&P 500 futures had earlier slipped on a hotter-than-expected UK inflation reading.
Why it mattersDoubts about AI spending are driving a flight into Treasurys, shifting both equity leadership and the rate outlook.
Warsh's no-guidance stance meets rising uncertainty on several fronts
AEI commentary notes that Fed Chair Kevin Warsh has consistently rejected forward guidance on rates, and that growing uncertainty may leave him feeling vindicated at next week's meeting. The piece cites the US-Iran war and the Russia-Ukraine conflict, which could push energy prices up or down depending on ceasefire prospects, plus wobbling signs in the AI investment boom, a possible bond market crisis in France and a Super El Niño that threatens next year's food supply. Together these make it harder for the Fed to forecast inflation and employment, the two parts of its dual mandate.
Why it mattersWithout forward guidance, investors must read incoming data and geopolitics themselves to judge the rate path.
French borrowing costs climb as ECB meets amid budget uncertainty
French bond yields kept edging higher on 22 October, making them an outlier in a day when yields elsewhere fell, according to the Wall Street Journal. The European Central Bank is expected to hold rates at its upcoming meeting, which comes as budget uncertainty in France has caused a spike in French borrowing costs. AEI commentary goes further, saying France appears to be near a full-blown bond market crisis. The U.K. government's budget presentation is also due in the week ahead and will draw attention after a hot UK inflation surprise on 22 October.
Why it mattersFrench debt stress could complicate ECB policy and spill into broader European bond and equity markets.
Oil jumps on Saudi strikes and planned renewed attacks on Iran
Oil prices jumped again on 22 October, driven by fresh strikes on Saudi Arabia and U.S.-Israeli plans for renewed attacks on Iran, the Wall Street Journal reported. The move added to market anxiety alongside the tech selloff. AEI commentary warns that damage to Saudi oil facilities, or continued Ukrainian attacks on Russian refineries, could trigger another energy price spike, while ceasefires in either conflict could send prices sharply lower. That two-way risk leaves the near-term inflation path unclear for the Fed.
Why it mattersEnergy swings feed directly into inflation expectations, which shape the Fed's next move.
Data behind the stories
On 22 October SPY closed at $763.96, down 1.18% on the day, while TLT rose 1.87% as Treasurys rallied, consistent with the yield drop. GLD fell 2.63% on the day. The Federal Reserve rate stands at 3.875%, and Polymarket gives 96.3% odds of zero Fed cuts in 2026, with 4.25% the most likely year-end rate at 69.7%.
What to watch
- Federal Reserve interest-rate decision on Wednesday of the coming week, expected to leave the Fed Funds rate unchanged. wsj.com
- Rate decisions from the European Central Bank and Bank of Canada, plus the U.K. government's budget presentation, in the same week. wsj.com
- Central bank decisions in Japan, New Zealand and Thailand, along with China's industrial profits and activity surveys. wsj.com
Key takeaways
- The Fed is widely expected to hold next week, but further hikes are anticipated in coming months as the U.S. economy looks robust.
- On 22 October the 10-year yield fell below 5% while the Nasdaq dropped 2.6% and the chip index fell 6.7%.
- French bond stress, oil spikes and AI-spending doubts add uncertainty, and Chair Warsh opposes offering forward guidance.
FAQ
Will the Federal Reserve raise interest rates next week?
Rates are widely expected to stay on hold at the Fed's Wednesday decision, following September's increase. Further hikes are expected in the coming months, but recent data and Fed comments suggest no urgency to move again right away.
Why did the 10-year Treasury yield fall below 5%?
On 22 October a tech selloff and global jitters sent investors into Treasurys. The 10-year yield fell nearly 0.2 percentage point, the sharpest one-day drop in more than three years, and went below 5% for the first time in nearly a month.
What is driving uncertainty for the Fed right now?
AEI points to the US-Iran and Russia-Ukraine wars and their effect on energy prices, wobbling AI investment, a possible French bond market crisis and a Super El Niño threatening food supply. Chair Warsh also rejects forward guidance.
The wire
Every item considered for this digest, newest first — published within 48h of 2026-10-24 00:42 UTC.
- Federal Reserve, ECB Expected to Keep Interest Rates on Hold wsj.com · 2026-10-23 16:23
- Whiting column: Inflation stems from multiple economic factors postindependent.com · 2026-10-23 00:00
- Stock Market News, Oct. 22, 2026: Tech Selloff Deepens as Flight Into Treasurys Drives Yields Lower WSJ · 2026-10-22 23:41
- The Federal Reserve at a Time of Uncertainty | American Enterprise Institute aei.org · 2026-10-22 19:11
- US Stock Market Today: S&P 500 Futures Fall On Hot UK Inflation Surprise finance.yahoo.com · 2026-10-22 13:00
How this digest is made. Headlines and article text come from the AISA Financial News and Tavily APIs; only items published in the last 48 hours are eligible, and duplicates across outlets are merged. A language model writes the summaries strictly from those texts and the live market data shown — every story links to its sources. Market data: AISA Financial, CoinGecko, Polymarket and Macro APIs.
Sources & citations
- Federal Reserve, ECB Expected to Keep Interest Rates on Hold wsj.com · 2026-10-23
- The Federal Reserve at a Time of Uncertainty | American Enterprise Institute aei.org · 2026-10-22
- Stock Market News, Oct. 22, 2026: Tech Selloff Deepens as Flight Into Treasurys Drives Yields Lower WSJ · 2026-10-22
- US Stock Market Today: S&P 500 Futures Fall On Hot UK Inflation Surprise finance.yahoo.com · 2026-10-22