New Delhi, Oct. 17 -- The US Federal Reserve is expected to keep interest rates unchanged in October before resuming monetary tightening, with markets pricing in a further 25 basis points (bps) hike by the end of 2026 and cumulative tightening of 75 bps by mid-2027, according to a commentary by CareEdge Global.

The ratings agency said the Fed's policy outlook had turned increasingly hawkish through 2026, culminating in a 25 bps rate hike in September, as geopolitical developments and elevated inflation reinforced expectations of tighter monetary policy.

The US-Israel conflict initially raised the prospect of higher interest rates, while an April ceasefire briefly eased expectations of further tightening. However, renewed conflict and th...