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News brief · Monday, October 26, 2026

Fed expected to hold Wednesday, Goldman sees another hike in December

The Fed is expected to keep rates unchanged on Wednesday, with Kevin Warsh's press conference in focus. Goldman Sachs sees another hike in December, a tightening path index futures traders will need to factor into their scenarios.

Reviewed by · Trader & founder of OrderFlowFutures

Macro & central banks

  • Fed: rates are expected to stay unchanged on Wednesday, after the September hike, the first since 2023. Attention will focus on Kevin Warsh's press conference.
  • Goldman Sachs: a pause in October, then a second hike in December, reflecting a compromise of one hike every two meetings. David Mericle says the tightening from the hawkish shift has been moderate, well below the four hikes the market had priced in.
  • Key point: how the Fed words its statement on the September hike.
  • Pakistan: policy rate raised by 50 bp to 12%, the first hike since April, as inflation runs above target and energy costs climb with the Gulf conflict.
  • Brazil: Finance Minister Dario Durigan wants a higher primary surplus next year, without giving a figure. The central bank will intervene in FX markets if needed, after Brazilian markets fell following Lula's reelection.

Indices & tech

  • BofA Global Research: AI-related capital expenditure has risen 1.2% of GDP since Q1 2020, a faster pace at a comparable stage than the 1970s oil boom and the 2010s shale expansion. Only the 1990s tech cycle (around 1.5% of GDP) stands higher.
  • Data centers: a Fed study estimates they added about 0.40 percentage point to US GDP growth in 2026, and they now account for nearly 46% of private office construction spending.
  • Big tech earnings are due this week, which matters given the weight of megacaps in the Nasdaq.
  • UK: Deutsche Bank expects Chancellor Healey to unveil a £20.4bn investment plan, well above its £8bn assumption, without breaching fiscal rules.

Geopolitics

  • Israel: a vote on Tuesday. Netanyahu's office denies reports of a possible escalation against Iran before the election.
  • Russia: the Kremlin says the planned trilateral talks with Ukraine and the US will not restrict military operations. They are scheduled in several weeks, in Abu Dhabi or Switzerland.

What to watch today

  • Tuesday: Israeli vote.
  • Wednesday: Fed decision followed by Kevin Warsh's press conference, plus the UK investment plan announcement.
  • This week: major tech earnings and US economic releases.

Brief compiled from the morning's news flow, AI-assisted and reviewed by the team. Not investment advice.

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