The probability of the Federal Reserve raising interest rates by 25 basis points in October is 71%, with attention focused on pause expectations.

First Abu Dhabi Bank Chief Economist Simon Ballard stated in a report that the Federal Reserve unanimously supported a 25 basis point rate hike last week and "perhaps should pause rate hikes next month." He said, "Yes, the unanimous decision to raise rates this month gave a clear signal of 'more tightening to come'." However, Ballard believes that pausing rate hikes at the next meeting in October would send an implicit message that, while the Fed is committed to returning inflation to target, it does not intend to initiate a preset cycle of tightening. According to LSEG data, money market pricing shows a 71% probability of a 25 basis point rate hike in October.