Key Points
- The Fed’s rate decision lands tomorrow, Wednesday 28 October, at 18:00 UTC, with Chair Warsh’s press conference following at 18:30 UTC. A hold at 3.75 to 4.00% is overwhelmingly expected after September’s 25 basis point hike, and no updated economic projections or dot plot are due at this meeting, so the tone of the statement, the vote count and the press conference carry the weight.
- Gold is trading at 4,019, pressing up into the 4,015 to 4,033 supply zone after a slide of roughly 4.7% from its 12 October high near 4,217, while the 10 year Treasury yield sits near 4.98%. Analysts quoted by Bond Buyer would not be surprised by as many as three dissents in favour of a hike, which would signal the Committee is leaning towards December.
- EUR/USD is trading at 1.1171, having broken below its 1.1182 range low and now sitting just above the 1.1162 low. A December hike is already priced at roughly 80%, so a hawkish hold is largely expected, and a patient tone from Warsh is the outcome with the most potential to surprise the dollar.
What Is the Fed Decision?
The Federal Open Market Committee, or FOMC, meets eight times a year to set the Federal Funds Rate, the rate at which banks lend to each other overnight. It is arguably the most important recurring event on the financial calendar, because that rate ripples through borrowing costs across the US economy and into currencies, bonds, equities and gold. Twelve officials vote, and the decision is published as a target range, currently 3.75 to 4.00% after the Committee raised rates by 25 basis points on 16 September, its first increase since July 2023.
Tomorrow’s meeting delivers the rate decision and the FOMC statement explaining the Committee’s reasoning, followed by Chair Kevin Warsh’s press conference. Unlike September, there are no new economic projections, so no dot plot, because those are published at only four meetings a year and the next comes in December. Warsh has also said he is not in the forward guidance business, which means markets will be reading his tone and word choice closely instead of receiving an explicit signal.
As with any event that is largely priced, markets do not react much to the headline decision if it matches expectations. What moves price is the gap between what was priced in and what arrives, whether that is the language of the statement, the number of dissents or the way the Chair answers questions about December.
What to Expect Tomorrow
A hold is the near-unanimous expectation, with futures showing little chance of an October hike. The more important question is how many officials disagree. Beth Hammack of Cleveland and Lorie Logan of Dallas are seen as the most likely to vote for a hike, and analysts quoted by Bond Buyer would not be surprised by as many as three dissents. Hammack, Kashkari and Logan dissented in favour of a hike in July, while the September hike itself passed unanimously, 12 to 0.
The backdrop explains why. Inflation has come in hotter than expected for two months in a row, and WTI near $101 a barrel keeps energy costs elevated, with September PCE inflation due on Thursday 29 October, the day after the decision. Against that, the labour market looks softer: September payrolls rose by only 29,000 against roughly 90,000 expected, and the unemployment rate edged up to 4.2%. Markets price roughly 64 basis points of hikes over the next year, and one analyst notes that bond yields have not made new highs after hot inflation reports, which suggests traders are as worried about growth as they are about prices.
There is also a political angle. The meeting falls six days before the midterm elections on Tuesday 3 November, and the Fed has historically avoided raising rates this close to a vote, which is one reason a hold now with a decision on December later is the consensus path. Warsh told markets after September that the hike had removed a dose of accommodation, so expect him to sound firm on inflation without necessarily committing to the next move.
Gold: Basing Under Supply Before the Decision
Chart: XAU/USD, H1 timeframe (TradingView, SMC)
Gold (XAU/USD) H1 chart, 11 to 27 October 2026: price fell from a high near 4,217 on 12 October to lows near 3,985 and 3,977, and is trading at 4,019.24 beneath the 4,015 to 4,033 supply zone, with the 3,977 to 3,985 lows as support.
Gold has been in a bearish structure since the 12 October high near 4,217, with lower highs capped by supply at 4,173 to 4,190 and again at 4,132 to 4,142. It rallied from a low near 4,070 on 14 October to 4,200 on 16 October, but the break of that low on 22 October sent price sharply lower, leaving lows near 3,985 on Friday and 3,977 on Monday. Since then it has built a base between those lows and the 4,015 to 4,033 supply zone, and at 4,019.24 it is trading right at the bottom of that zone.
This is the yield and dollar story again. Gold pays no income, so it competes with assets that do, and a Fed that holds with a tightening bias keeps real yields elevated even with the 10 year yield easing back to around 4.98% from a high near 5.36% in early October. A price sitting under supply with a low just beneath it, directly ahead of the one event that can reset the yield story, is exactly the kind of setup this column exists to flag.
Above, 4,033 is the first level buyers need to clear, with further supply at 4,086 to 4,102 and 4,132 to 4,142. Below, the 3,977 to 3,985 lows are the floor. A hawkish outcome that lifts yields and the dollar would put them under pressure, and a break would leave no marked demand on the chart until price finds one, opening a fresh leg lower.
EUR/USD: Testing the Low as the Dollar Waits for the Fed
Chart: EUR/USD, H1 timeframe (TradingView, SMC)
EUR/USD H1 chart, 25 September to 27 October 2026: the pair rebounded from a low of 1.1114 on 14 October to 1.1269 on 16 October, ranged between 1.1182 and 1.1262, then broke the range low and is trading at 1.1171, just above the 1.1162 low, with demand at 1.1113 to 1.1126 below.
EUR/USD dropped to 1.1114 on 14 October and recovered to 1.1269 on 16 October, where it met the 1.1240 to 1.1270 supply zone. It then ranged between 1.1182 and roughly 1.1262, printing lower highs, before a bearish change of character on Monday broke the range low. Price is now at 1.1171, just above the 1.1162 low set overnight, a level that matches the early October low, so the pair is sitting on support that has already held once.
The decision matters for the pair through the rate gap. A hold with a tightening bias that keeps December alive supports US yields, with the 2 year at 4.71%, and with them the dollar, while a patient Chair would do the opposite. The ECB decision follows on Thursday 29 October, so the pair has two central bank events in 48 hours.
A break below 1.1162 would open the 1.1113 to 1.1126 demand zone formed on 14 October. To the upside, buyers would need to reclaim the 1.1182 to 1.1195 supply zone first, with 1.1220 to 1.1226 above it.
Three Scenarios for Tomorrow
Dovish hold: patient tone and no hike dissents
A hold with balanced statement language, no dissents for a hike and a Chair who declines to endorse December would take pressure off yields and the dollar. That is the backdrop gold needs to lift out of its base and clear the 4,015 to 4,033 supply zone toward 4,086 to 4,102, and for EUR/USD to recover the 1.1182 to 1.1195 zone. With a December hike priced at roughly 80%, this is the outcome that would carry the most surprise.
Hawkish hold: hold delivered, tightening bias intact (base case)
The decision is a hold, but one or more officials dissent for a hike and Warsh repeats that September removed a dose of accommodation without committing to the next step. That keeps December priced and probably produces a muted, two way reaction, with gold ranging between the 3,977 to 3,985 lows and the 4,033 supply, and EUR/USD hovering near the 1.1162 low while markets wait for Thursday’s PCE inflation data and the ECB.
Hawkish surprise: a hike, or a clear signal that December is coming
Futures show little chance of an October hike, so the more realistic version is three dissents plus a Chair who effectively commits to a December move. Either would push yields higher and strengthen the dollar, putting gold’s 3,977 to 3,985 lows under pressure, where a break would open a further leg lower, and likely taking EUR/USD through 1.1162 toward the 1.1113 to 1.1126 demand zone.
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