Sharp Decline in Fed's Interest Rate Increase Expectations

The Fed's increase in interest rates to between 3.75% and 4.00% in September and the statements of the head of the institution, Kevin Warsh, that they would not make concessions on inflation, also increased the markets' expectations for October.

The expectation of a 25 basis point interest rate increase for the meeting on October 28 has generally been around 70% for the last 10 days.

However, there was a sharp decline in this expectation yesterday evening.