Key facts
- Fed held rates steady at 3.75%-4% target range.
- Decision was widely expected by markets.
- Inflation remains elevated while unemployment is low.
- 10-year Treasury yield rose 5 basis points; 2-year yield dipped 2 basis points.
- 82% odds for a December rate hike priced in.
- AI-related debt is seeing wider credit spreads.
The Federal Reserve maintained its target interest rate range at 3.75% to 4% on Wednesday, in line with market expectations. Officials cited elevated inflation and a low unemployment rate, with the job market characterized by low hiring and firing. Bond yields saw fluctuations post-decision, with the 10-year Treasury yield increasing by 5 basis points and the 2-year yield decreasing by 2 basis points. Markets are pricing in an 82% probability of a rate hike in December.