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Monetary Affairs
Oct 26, 2026

Preview: Fed In a Hawkish Pause in Its Mini Tightening Cycle Ahead of Mid-Term Elections, Despite Persistent Inflation

Nouriel Roubini

Brunello Rosa

Nato Balavadze

In this paper, we discuss:

  • Why the Fed is expected to hold rates at 3.75-4.00% in October;
  • How persistent inflation and energy prices support further tightening;
  • Why AI investment and resilient demand complicate monetary policy;
  • Why a December hike remains likely despite the October pause;
  • How Warsh’s hawkish stance and limited guidance could affect the rate outlook.

Download PDF: Federal Reserve Preview – October 2026

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