BoC & Fed Rate Decision Today – Daily Market Update Oct 28, 2026

Today is one of the biggest days of the year for currency traders. The Bank of Canada decides on rates at 13:45 GMT, the Federal Reserve follows at 18:00 GMT with Chair Kevin Warsh's press conference at 18:30 GMT, and the UK government presents its Autumn Budget. Germany's GfK consumer confidence kicks things off this morning.

Today's Key Economic Events (GMT)

Bank of Canada: A Live Decision on a First Hike

The Bank of Canada has held its overnight rate at 2.25% for seven consecutive meetings, but the outlook changed quickly this month. Governor Tiff Macklem said the bank's quarterly inflation projections, published alongside today's decision, are likely to be revised higher because oil prices have stayed elevated. Money markets now price roughly an 80% to 84% chance of a 25 basis point hike to 2.50%, which would be the first increase in a year. Economists are more divided: in a Reuters poll, 19 of 34 expected a hike, and a majority see another one by March 2027.

The case for a hike rests on inflation, which has risen to about 3.1% on higher gasoline prices. The case for waiting rests on a weakening labor market and softer growth, and some economists, including RBC, say there is a real chance the bank holds and signals a move for December or January instead. Because a hike is largely priced in, a move to 2.50% with a firm outlook would support the Canadian Dollar, while a hold would likely be a surprise that sends CAD sharply lower. The Monetary Policy Report and Macklem's press conference will be read for guidance on further hikes.

Federal Reserve: A Hold Expected, With December in Focus

The Fed raised its target range by 25 basis points to 3.75%-4.00% on September 16, its first hike since 2023, and is widely expected to hold it today. Futures price more than a 90% chance of no change. The Fed's September projections showed the median rate at 4.1% for the first projection year and 3.9% for the second, both revised up from 3.6% and 3.4% in June, pointing to one more hike by year-end. Minutes of the September meeting showed most officials saw another increase as likely appropriate by year-end, and markets price about a 75% chance of a December hike, with all 100 economists in a Reuters poll expecting one.

Since September, inflation has run hot, with CPI at 3.7% and PPI well above forecasts, while the labor market has softened, with September payrolls adding only 29,000 jobs. Because a hold is already priced in, the market reaction will depend on the tone of the statement and on Warsh's press conference. Warsh has said he does not signal decisions ahead of meetings and has kept his press conferences short. A hawkish hold that keeps a December hike in play would likely have a limited impact, while a more cautious tone, with softer language on inflation or the labor market, could lower December odds and ease the Dollar and Treasury yields. A surprise hike would be a major shock.

Germany GfK Consumer Confidence: Another Step Lower Expected

The GfK index tracks how German households feel about their finances, jobs and the broader economy. It fell to -30.6 for October from -26.8, far below its long-term average of about -0.4, as higher energy costs weigh on household budgets. For November, consensus is -30.9 and the forecast is -32, which would mean confidence slipping further.

When families are this cautious, they tend to cut spending and protect savings, which hurts retail sales and company earnings and can pressure European stocks and the Euro. A reading better than -30 would hint at stabilizing sentiment, while a drop toward -32 would add to growth worries ahead of Thursday's ECB decision.

UK Autumn Budget

The UK government presents its Autumn Budget today, one week before the Bank of England's November 5 meeting, where a rate hike is widely expected after September inflation rose to 3.5%. Traders will watch for changes in tax and spending plans and in government borrowing, since they can move gilt yields and the Pound.

Market Takeaway

Risk note: This content is for informational and educational purposes only and does not constitute financial or investment advice. Forex trading involves substantial risk of loss and is not suitable for every investor. Always conduct your own research and consult a licensed financial advisor before making trading decisions. Volatility around central bank decisions can be extreme.