Markets Eye Fed Hold and Bank of Canada Hike Bets Ahead of Wednesday
Market Talk reports markets expect the Fed to hold rates with a hawkish pause, while bets on a Bank of Canada hike keep building ahead of Wednesday.
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what happened
According to Market Talk, most market participants expect the Fed to keep rates unchanged on Wednesday. CME Group data put the odds of an October hike at about 7%. BMO analysts expect a hawkish pause and possible dissents on the committee. US Treasury yields have barely moved, with the 10-year up to 4.992% and the two-year up to 4.735%.
In Canada, most economists lean toward a Bank of Canada hike, even though core inflation sits below the 2% target. Nikkei futures were up 1.9% by the morning, buoyed by hopes for AI-related demand. The dollar traded at 157.98 yen.
why it matters
The key for markets is what Fed Chair Warsh says at the press conference, since traders will use it to judge the rate path for the rest of 2026. Decisions from the Bank of Canada and the UK budget should add volatility to the Canadian dollar and sterling.
market impact
Dollar, US Treasuries and Canadian dollar: Fed and Bank of Canada decisions set the direction for rates and currencies
tags
instruments
sources
- Nikkei May Rise on Hopes for AI Demand, Domestic Earnings — Market Talk, 27 October 2026 at 23:58 UTC
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