Federal Reserve Governor Philip Jefferson signaled the central bank is unlikely to raise rates again at its October meeting, citing rising bond yields and the need for more time to judge the economy. The remarks follow similar comments from New York Fed President John Williams and have pushed prediction-market bets on an October hike sharply lower, even as Minneapolis Fed President Neel Kashkari remains open to further increases.
Federal Reserve Governor Philip Jefferson said the Federal Open Market Committee is likely to hold rates steady at its October meeting, a signal that has pushed bets on an October rate hike sharply lower this week.
Jefferson Sees No Urgency for a Hike
In a speech delivered in Virginia, Jefferson said he backed the September rate decision but does not see urgency for further increases. He noted that bond yields across the term structure have risen further since the September FOMC meeting, a sign investors are reassessing the macro outlook.
He added that officials will need their own judgment on the next move, which may take more time — language that suggests an October hike is unlikely. Jefferson's comments echo those of New York Fed President John Williams, who earlier said he sees no urgency for an immediate move on policy. The Fed delivered its first rate hike since 2023 at last month's September FOMC meeting, citing inflation concerns.
Following Williams' remarks and softer PCE inflation data released the prior day, Goldman Sachs pushed its forecast for a second rate hike to December, adding that the Fed may ultimately decide further increases aren't necessary.
Kashkari Keeps the Door Open
Minneapolis Fed President Neel Kashkari struck a different tone in a Reuters interview, saying he remains open-minded on how the Fed should proceed and has no strong view on whether October is the moment for another hike. Still, he expects further rate increases heading into the new year.
Kashkari has repeatedly flagged rising inflation and said the Fed needs more rate increases to bring it back to its 2% target, adding that further hikes could be necessary if the economy keeps outperforming.
Betting Markets Swing Toward a Hold
Traders have responded by paring back hike bets. Data from Polymarket shows a 77% chance the Fed holds rates steady in October. The odds of a hike sit at just 23%, down from a high of 70% last week.
The swing followed Williams' remarks and the softer PCE print released a day earlier.
Source: CoinGape
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