Archive photo: The entrance of the Federal Reserve’s Eccles Building in Washington, photographed in 2011. Board of Governors of the Federal Reserve System, U.S. government work (cropped).
The Federal Reserve is due to announce its interest-rate decision Wednesday afternoon, one day before two major government reports provide a new reading on economic growth and inflation.
The timing leaves the October policy announcement ahead of Thursday’s advance estimate of third-quarter gross domestic product and September personal income and outlays report. The Bureau of Economic Analysis lists both releases for October 29 at 8:30 a.m. Eastern.
The Fed’s official calendar schedules the rate decision for 2 p.m. Eastern Wednesday and a press conference for 2:30 p.m. No October decision has been announced.
Inflation and hiring point to different pressures
The latest published consumer-price report showed inflation accelerating. The Consumer Price Index rose 0.6% in September from the previous month and 3.7% from a year earlier, according to the Bureau of Labor Statistics. Gasoline rose 9.1% during the month and accounted for more than half of the overall monthly increase.
Excluding food and energy, consumer prices rose 0.3% for the month and 2.6% over the year. Those are CPI readings, not the personal consumption expenditures price measure included in BEA’s income and outlays report.
Hiring was subdued in September. Nonfarm payrolls increased by 29,000 and the unemployment rate was 4.2%, with both measures little changed, the BLS said in its employment report.
The starting point is a September rate increase
At its September 16 meeting, the Federal Open Market Committee voted 12-0 to raise its target range by a quarter percentage point to 3.75%-4%. Its statement said inflation remained elevated and described the increase as supporting a timelier return to the Fed’s 2% goal.
Wednesday’s decision will show whether the committee changes that range again or leaves it in place. The new statement will also provide its updated assessment of activity, employment and inflation. Neither the prior decision nor the published data establishes today’s outcome.
Another set of data arrives Thursday
Thursday’s GDP release will be the advance estimate, rather than a final accounting of third-quarter growth. The personal income and outlays release will provide September consumer-spending and PCE price data.
For businesses and investors, the sequence matters: the rate decision and press conference come first, followed by the next official growth and PCE readings the following morning. The scheduled reports are still pending and do not reveal what the committee will decide Wednesday.
JBizNews Desk | Washington
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