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Fed likely to hold rates in October but markets expect hike in December amid inflation and AI-driven growth pressures

Market News
26 Oct 2026, 21:18 WIB
Seeking Alpha
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Neutral
Fed likely to hold rates in October but markets expect hike in December amid inflation and AI-driven growth pressures

The Federal Reserve is expected to keep interest rates steady at 3.75–4.00% during its October 28 meeting, though markets price in a nearly 78% chance of a rate hike in December. Inflation remains persistently high, while slower job growth and financial pressures complicate the Fed's decision-making. The surge in AI investment is creating a dilemma: while infrastructure spending supports growth, it also raises capital demand and inflation risks. Semiconductor stocks have dropped sharply and Treasury yields have fallen, signaling growing investor concerns about economic growth. A pause in rate hikes may provide short-term relief but won't address the risks tied to AI funding. The author remains cautious on semiconductor stocks, favors cash-rich tech companies, and holds about 15% cash.

The FOMC interest rate decision is the focus, with Pluang's Technology sector data providing context as of Oct 27, 2026 00:11 WIB. Of 150 priced Technology-sector US stocks tradable on Pluang, 82 rose and 68 fell today. Notable movers include FSLY (Fastly Inc) at USD 25.89 with a 1-day change of +6.06%, CORZ (Core Scientific Inc) at USD 13.86 up +5.80%, and IREN (Iris Energy Limited) at USD 26.34 up +5.74%.

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