Live updates on November Fed rate decision

Stocks had modest gains – but were off their session highs – in the minutes leading up to the Federal Reserve’s 2 p.m. ET decision.

Though policymakers are expected to skip a rate hike Wednesday, investors shouldn’t bet on the Federal Reserve ending its policy-tightening campaign, said Jeffrey Lacker, former president of the Richmond Fed.

“There’s nothing in it for him [Chair Jerome Powell] to take interest rate hikes off the table and signal a definitive pause for a long time,” he said on CNBC’s “Squawk on the Street.” “He’s going to keep them on the table. They’re still far from getting done bringing inflation under control.”

Lacker noted that wage rate gains don’t seem to be coming down in a material fashion and that recession risks have receded in the past six to 12 months.

“It looks like 3.5% or 4% is right around where inflation is now, so we have a ways to go is the point,” he said.

–Darla Mercado

Central bank officials are expected to hold steady on policy Wednesday, but the main event will be Federal Reserve Chair Jerome Powell’s upcoming press conference.

Fed funds futures pricing suggests a roughly 98% likelihood that the benchmark rate will remain within the central bank’s target range of 5.25% to 5.5%, according to the CME FedWatch Tool.

The Fed’s rate decision arrives nearly a week after a report showed that the U.S. gross domestic product grew at a 4.9% annual pace – surpassing expectations. At the same time, Treasury yields have remained high and the rate on the 10-year note popped over 5% in October.

These developments make Powell’s upcoming press conference at 2:30 p.m. ET even more important. Investors will be looking for additional context around the Fed’s latest decision, as well as insight into the path forward for rate policy.

Read more about Powell’s announcement here.

–Darla Mercado, Jeff Cox