The Fed Decides Today, And Its Projections Imply One More Rise

Brian CurcioPublished October 28, 2026

At 2:00pm ET today, the Federal Reserve is expected to leave its benchmark interest rate alone, at 3.75% to 4%, which makes Chair Kevin Warsh's guidance, rather than the decision itself, the part that can move a price. Overnight, SK Hynix reported third-quarter operating profit about 630% higher than a year earlier and South Korea's KOSPI closed 6.63% higher, hours before Microsoft and Alphabet are due to report. Australia's inflation picked up again while New Zealand's central bank held by a single vote, a reminder that the same question is getting different answers around the world.

Fast Facts

The Conference Board's consumer confidence index rose to 91.7 in October from 84.2 in September, well above economists' forecast of 81 (Read More)
Boeing booked an overall loss of $116 million against a $5.34 billion loss a year earlier, with total revenue up about 4% to $24.19 billion (Read More)
Up 2.1% in the 12 months through August, home prices on the S&P Cotality Case-Shiller national index grew a little faster than July's 1.9% (Read More)
Nvidia put $3 billion into Meta's equity offering, and Meta shares fell 1.64% on Tuesday while Nvidia rose almost 1% (Read More)
Guidewire is buying Hyperexponential for $1.7 billion in cash, a deal it expects to close next year (Read More)
Credit default swaps, contracts that pay out if a borrower fails to repay, are back in fashion among investors worried about an AI blow-up (Read More)

Global News

Jio Platforms opened at 1,358 rupees against its 1,119 rupee offer price, about 21% higher, after India's largest ever IPO raised more than $3 billion and drew 22.19 times the shares on offer (Read More)
Standard Chartered's third-quarter net profit rose 46%, and its shares closed 7.6% higher (Read More)
UBS reported third-quarter profit up 8% to $2.69 billion and said it is speeding up its buyback, the plan to buy some of its own shares back from investors (Read More)
The Burnham government's first U.K. budget lands today, with a higher bank corporation tax surcharge, steeper gambling taxes and property tax changes expected (Read More)

The Fed Is Expected To Hold At 3.75% To 4% Today, And The Guidance Is The Part That Moves Prices

The Federal Reserve's rate-setting committee is scheduled to release its decision at 2:00pm ET this afternoon, with Chair Kevin Warsh's press conference at 2:30pm ET. The Wall Street Journal and the Economic Times both report that a hold is widely expected, meaning no change to the rate the Fed actually sets. That rate is not one number but a band, called the federal funds target range, and it sits at 3.75% to 4.00% after the committee raised it by a quarter of a percentage point on September 16 on a 12-0 vote. The minutes of that meeting record that most participants, not all, assessed that one more increase "would likely be appropriate" by year end. The minutes also name geopolitical energy prices and AI-related investment among the reasons inflation has stayed elevated.

Here is where prices stood going in. At Tuesday's close, October 27, the two-year Treasury yield was 4.70%, up 2 basis points; a Treasury yield is the yearly interest rate the U.S. government pays to borrow, and a basis point is one hundredth of a percentage point. The ten-year yield, the cost of lending to the government for a decade, slipped 1 basis point to 4.99%. The gap between the two was 29 basis points.

When nearly everyone already expects an outcome, that outcome is baked into today's prices before anyone speaks, and what moves a price is the gap between what was expected and what actually arrives. So the hold itself is close to a non-event, and the market-moving material is whatever the statement and press conference say about what comes next. September's projections are the clearest marker of that. They put the median projected federal funds rate for the end of 2026 at 4.1%, up from 3.8% in June; a median is the middle figure when every official's own forecast is lined up from lowest to highest. The midpoint of the current range is 3.875%, so that 4.1% implies about one more quarter-point increase before the year is out.

Three things keep that from being settled. A projection is a forecast made on one day, not a commitment, and it can be revised at the next meeting. The Journal reports that Warsh wants the Fed to stop previewing its coming moves, while several colleagues argue the public is still owed an explanation of how the committee will respond; those positions pull the statement's language in opposite directions. And the decision lands hours after this post publishes, so all of this describes the setup, not the outcome.

Sources: Federal Reserve statement · Federal Reserve minutes · Federal Reserve projections · WSJ

SK Hynix Reported A 630% Jump In Quarterly Operating Profit, And Korean Shares Rose Sharply With It

SK Hynix, the South Korean company that makes memory chips, said Wednesday that its operating profit for the third quarter rose about 630% from the same three months a year earlier, to 83.33 trillion won, or $62.4 billion on Al Jazeera's conversion. Operating profit is what a company has left from its main business after the costs of running it. The stock closed 10.89% higher on Wednesday. South Korea's KOSPI, the main index of Korean shares, closed up 6.63%, a large one-day move for a whole country's biggest companies; Taiwan's TAIEX rose 2.04% and Japan's Nikkei added 1.08%. At Tuesday's U.S. close, the S&P 500 rose 0.6% and the Nasdaq Composite 1.18%.

Memory chips are the part of a computer that holds whatever the machine is working on at that moment, and the systems running today's AI models need a great deal of that holding space. Only a small number of companies make these chips at the scale those systems require, and SK Hynix is one of them, which is why its numbers get treated as a verdict on the whole business. That is also why one line in the outlook travelled further than the profit figure. The company said supply constraints will last through 2030, meaning it expects buyers to want more memory than it can produce for years. A share price is a judgement about profits still to come rather than profits already banked. One strong quarter tells you what a stretch of the past looked like; a statement about years of tight supply is a forecast, and it reaches many quarters of future pricing at once.

The companies buying those chips report next. Microsoft and Alphabet are expected after Wednesday's U.S. close, Amazon on Thursday and Apple on Monday, and none of those numbers exists yet. For scale, the research firm Gartner forecasts global AI investment of $2.7 trillion in 2026 and $3.6 trillion in 2027, an estimate of future spending rather than a tally of spending done. Indian IT services shares fell by as much as 5% in the same session, though: one day's headline does not push every company in a sector the same direction.

Sources: Al Jazeera · Economic Times · MarketWatch

Australia's Inflation Rose In September, While New Zealand Held Its Rate By A Single Vote

Australia's annual inflation rate reached 4.3% in September on the monthly measure of consumer prices, up from 4.0% in August. The separate quarterly series pointed the same way, with prices up 3.9% over the year in the September quarter. That matters because the Reserve Bank of Australia meets November 2-3, and it has already lifted its cash rate to 4.60% after a quarter-point rise in September. The cash rate is what it sets for overnight lending between banks, and it anchors what households and businesses pay to borrow. New Zealand went the other way. Its central bank surprised markets by leaving its rate unchanged, and the Journal reports the decision carried on a 4 to 3 board vote, with the bank still saying further increases are likely.

A central bank has one main lever, the policy rate it actually sets. Raising it, which economists call tightening, makes borrowing more expensive, so people and companies spend a little less and the pressure pushing prices up eases. Holding it is a bank saying it thinks it has done enough for now and wants to see what its earlier increases do before adding more. Same question, same lever, different answers, because each country is reading its own inflation numbers. Four of the seven people on New Zealand's board wanted to wait and three did not, which is what a close call looks like from the inside. The Fed announces its own decision this afternoon, one of several answers landing this week.

Sources: Investing.com · WSJ on Australia · WSJ on New Zealand

What To Watch

Reporting today:

Microsoft (MSFT), after the close. Analysts' average estimate is $4.71 in earnings per share, against $4.13 a year ago.
Alphabet (GOOGL), after the close. The average estimate is $2.94, against $2.87 a year ago.
GE Vernova (GEV), before the open. The average estimate is $4.03, against $1.64 a year ago.
KLA, ServiceNow, T-Mobile and Fortinet are expected after the close.

Later this week:

Amazon (AMZN) is expected Thursday after the close, with an average estimate of $2.01 against $1.95 a year ago.
Intel (INTC) is expected Thursday after the close, with an average estimate of $0.28 against $0.11 a year ago.
Eli Lilly, Mastercard, Merck, Caterpillar, Shell and TotalEnergies are expected Thursday before the open.
The Bureau of Economic Analysis is expected to release third-quarter Gross Domestic Product, the total value of what the economy produces, along with Personal Income and Outlays, on Thursday at 8:30am ET.
ExxonMobil, AbbVie, Chevron, AstraZeneca and BP are expected Friday before the open.

The Classroom Takeaway

A decision almost everyone expects can still move prices, because the surprise is never in the decision itself. It is in what gets said about next time. Students can feel how that works from the inside when they sit in the Fed's chair and set the rate themselves.