Live: US Fed holds rates unchanged, chance of local rise more than 75pc

The US Federal Reserve held interest rates unchanged at its most recent meeting, but in Australia, high inflation data suggests we're likely to hike rates.

Follow the day's financial news and insights from our specialist business reporters on our live blog.

Disclaimer: this blog is not intended as investment advice.

Choose what information you see below by using filters

Here's what the trajectory of US central bank interest rates have been for the past five years.

A steep climb to attempt to control inflation kicked off by the war in Ukraine and global supply chain issues, followed by a slight deviation as conditions changed.

All eyes on the US central bank, but there was other news too!

Global stocks and major Wall Street indexes held gains on Wednesday after the Federal Reserve held interest rates steady, as expected, and traders awaited earnings from two titans of the AI buildout, Microsoft and Alphabet.

In a 10-2 decision, the US central bank said it would maintain its benchmark interest rate within the current 3.75%-4.00% range.

US treasury yields extended their gains after the decision.US/

US stocks pared gains slightly, and spot gold prices were little-changed.

MSCI's gauge of stocks across the globe rose 2.46 points, or 0.22%, to 1,132.20.

The Fed's decision "reflects the continued balancing act between inflation concerns and an economy and employment situation that have remained relatively resilient," said Charlie Wise, head of global research at TransUnion in Chicago.

Earlier, market moves had been mostly modest ahead of the Fed decision, outside of Asia.

New Zealand's central bank surprised investors by leaving interest rates on hold, contrary to expectations for a hike, while the Bank of Canada raised rates for the first time in three years.

The European Central Bank and Bank of Japan are expected to issue policy decisions this week as well.

Traders' attention will also turn to Thursday's US Personal Consumption Expenditures data, which could offer further insight into the trajectory of monetary policy.

"While the September dot-plot suggests just one more hike, another increase in energy prices or further strong data prints could bring additional tightening into play next year," said Kay Haigh, head of fixed income and liquidity solutions at Goldman Sachs Asset Management in New York.

On Wall Street, the Dow Jones Industrial Average rose 91.54 points, or 0.17%, to 52,469.11 and the S&P 500 rose 5.42 points, or 0.08%, to 7,728.60. The Nasdaq Composite fell 43.31 points, or 0.16%, to 26,434.50.

The pan-European STOXX 600 index rose 0.07%.

The AI rally faces its next test after the market close, when technology giants Alphabet and Microsoft are due to report earnings. Investors will be looking out for signs of changing trends in capital spending, the driver of the AI boom, and scouring for evidence of returns that would justify the hefty cost of the AI build-out.

A series of AI-related funding announcements from Meta, SpaceX and Broadcom this week has once again tested the market's willingness to pay for further building, though

Anthropic's filing for an initial public offering showed results that many investors regarded as stronger than expected, providing support.

Earlier on Wednesday, the Reserve Bank of New Zealand surprised investors by keeping interest rates at 2.75% in a narrow vote, sending the kiwi down 1.2%.

"Today's decision shows the RBNZ is willing to surprise markets, a reminder that central banks do not take orders from markets," Carol Kong, a currency strategist at Commonwealth Bank of Australia, said.

In the UK, finance minister John Healey delivered a cautious first budget, one that prioritised stability in the bond market over the kind of big spending moves that Andy Burnham talked about when he became prime minister. Britain's stocks, bonds and currency barely reacted to the statement, in which he pledged to stick to fiscal ​rules, while accepting a smaller fiscal cushion due to rising energy prices ‌and borrowing costs.

The pound was down a touch at $1.3301, while UK government bond yields edged up.

Israel's shekel fell 2.3%, as election results showed Prime Minister Benjamin Netanyahu's right-wing bloc performing more strongly than expected, but still falling short of a parliamentary majority.

In commodities, oil prices rose after an attack on a refinery in Saudi Arabia, the world's biggest crude exporter, renewed concerns around the risks to supply in the Middle East.

Brent crude futures 1.4% to $115.48 per barrel, as US crude rose nearly 3% to $102.86.

So, the result of the Fed's meeting overnight was expected.

But that doesn't mean interest rates are on hold forever in the world's biggest economy.

The outcome of this week's meeting was widely expected after top Fed ​officials indicated they saw no rush to ​raise rates again following the quarter-percentage-point increase ⁠approved last month, despite inflation data in the meantime that was stronger than forecast and concerns that price pressures are broadening across the economy.

Energy costs remain high, including for diesel fuel, which is a key input for shipping, agriculture, and other industries. Inflation and the cost ​of living in general have been central to the political races that will determine whether Trump's Republican Party remains in control ​of both houses of Congress on ⁠November 3, or whether Democrats move into leadership positions and gain more robust oversight powers, including over the Fed.

Financial markets are still pricing in a couple of additional rate hikes in the coming months, though with slightly less conviction than before Fed Chair Kevin Warsh spoke.

Pricing shows about an 80% chance of a rate hike at the Fed's December 8-9 meeting, with another ⁠likely by March.

Inflation, ​which is currently around a percentage point above the Fed's target, has shown little progress in recent ​months.

The US central bank has missed its inflation target for five and a half years, a fact that has left some officials worried that businesses and households are becoming accustomed to faster price increases and may plan ​for them in ways that will make inflation harder to control.

The US Federal ​Reserve held interest rates steady, as expected, opting to delay any changes to borrowing costs until after next week's mid-term elections in the nation and ‌awaiting further data on the path of inflation.

'The Fed' as it is known is the US central bank. Our equivalent is the Reserve Bank, which will make its decision on interest rates on Tuesday.

In a 10-2 decision, the US central bank said it would maintain its benchmark interest rate within the current 3.75%-4.00% range while acknowledging that inflation "remains elevated," upgrading its assessment of the economy, and hinting that further rate hikes may be coming depending on the performance of inflation.

Locally, a 'hot' - higher than expected - result for inflation adds weight to the likelihood of rates increasing on Melbourne Cup Day.

Here's what the rate-setting Federal Open Market Committee said in its latest policy statement:

"The accumulation of more information will help the Committee determine the policy stance appropriate to ensure ​a timely return of inflation to the Committee's 2% goal... The Committee will deliver price stability."

Fed ​Chairman Kevin Warsh, speaking in a press conference following the end of the policy meeting, did not offer guidance on the outlook for ⁠monetary policy, but acknowledged that the central bank had not achieved price stability.

"We're working on it," he said.Warsh, who took over as head of the central bank in May, ​added that he does not believe "in prejudging meetings" and noted that "a lot of things can happen, so I'm not going to be able to share with you my musings about ​what happens when this group gets together six weeks from now."

Fed Governor Lisa Cook, currently being targeted by President Donald Trump for removal from the central bank, cast her first dissent on a central bank policy decision, favouring a quarter-percentage-point rate hike. Cleveland Fed President Beth Hammack, a consistently hawkish voice, also dissented in favour of the same rate increase.

Australian dollar: 0.5% to 70.57 US cents

Hello, I'm Daniel Ziffer from the ABC business team and I'll be taking you through the morning on our business, finance and economics blog.

Overnight, Wall Street indices were up in tandem.

The blue-chip Dow Jones of 30 mega-companies like Boeing and Visa was +0.3% to 52,510 points.

The broader S&P 500 that covers 500 of the largest listed companies in the US +0.3% to 7,742 points.

The tech-heavy Nasdaq was +0.2% to 26,528 points.

Our market is set to lift a similar level, with the ASX 200 futures index tipping a rise of +0.2% or 22 points to 8,882 points.

There’s lots to get to, all of it news, analysis and information and none of it financial advice.