Trump opens Cook inquiry while traders favor October Fed hold

A White House memo says President Donald Trump established a committee on Oct. 7 to investigate allegations against Fed Governor Lisa Cook and report whether there is cause for her removal. The move advances the administration’s effort to remove Cook, but does not decide October rates. Traders strongly favor the Fed leaving rates unchanged after its October meeting.

That expectation strengthened over Oct. 1 and 2, with the sharper rise coming after the weak September jobs report. The Bureau of Labor Statistics said payrolls grew by just 29,000 and unemployment reached 4.2%; Reuters reported the figures further reduced expectations for an October rate increase. The hold was already favored before that report, and the reason for the earlier rise on Oct. 1 is not clear. The Cook inquiry is a new development, not a reported explanation for the rate bets.

The Fed raised its target range by 25 basis points at its September meeting, its first increase after a period of holding rates steady. Minutes released Oct. 7 said most officials saw another increase as appropriate by year-end, citing inflation risks. Governor Christopher Waller said the next day that further increases might be needed but left room for an October pause. Traders also favor an increase after the December meeting, so an October hold need not mean rates stay unchanged through year-end.

The next key test is the September consumer price report, scheduled for Oct. 14. Higher inflation could strengthen the case for another increase, while softer prices could support waiting. The Fed meets Oct. 27–28, when its statement will announce the decision.