Week Ahead: Fed Announces Rate Decision Oct. 28; Alphabet, Microsoft and Amazon Report Earnings; Q3 GDP and September PCE Data Due Oct. 29

A near-certain hold, and a week that may turn on something else

On Wednesday, Oct. 28, the Federal Reserve will announce its interest-rate decision at 2 p.m. ET. Chair Kevin Warsh will hold a press conference afterward^[29][1]. Almost no one expects a change. In a Reuters poll taken Oct. 16–20, 94 of 100 economists said the Fed would hold its range at 3.75%–4.00%^[4].

Yet all 100 of those economists expect a hike at the Dec. 8–9 meeting^[4]. On Oct. 23, futures markets put the odds of an October hike at about 10%^[2]. So the decision itself looks settled. The fight is over what comes next, and over how the biggest companies in the stock market will pay for their bets on artificial intelligence.

Two other big events crowd the same days. Alphabet and Microsoft report quarterly results after the market closes on Oct. 28. Amazon follows on Thursday, Oct. 29^[1][24]. That same Thursday, the government releases its first estimate of third-quarter growth and September inflation data^[6][8].

How the Fed got here

The Fed raised its target range by 0.25 percentage point to 3.75%–4.00% on Sept. 16. The vote was unanimous. It was the first increase since 2023^[3]. Policymakers acted because inflation has stayed well above the Fed's 2% goal.

Consumer prices rose 3.7% in the 12 months through September, by the consumer price index (CPI)^[5]. That's the headline number. Gasoline rose 34.2% over the year, and core CPI, which leaves out food and energy, rose 2.6%^[31].

In September, most policymakers projected one more hike by year-end^[3]. Warsh has declined to say whether that hike comes in October or later. "I don't prejudge meetings," he said^[5][21]. He has also said that previewing each decision (what the Fed calls forward guidance) is "not that business anymore"^[5]. The reasoning is that a preview boxes the Fed in.

Is the market too calm?

Some commentators on the right say it is. Breitbart reports that futures priced a record 95% chance of a hold even after CPI hit 3.7%^[5]. Other Oct. 23 readings of the CME FedWatch tool put the hold chance nearer 90%. Breitbart's headline says Wall Street is "daring" Warsh to raise rates^[5].

Hot Air makes a related argument. It says investors have come to believe the Fed will always protect stock prices. It calls that belief "Fedementalism" and argues a hike could break it^[19]. To these writers, Warsh's refusal to give guidance is correct policy. They say markets have misread it as a promise of no hike^[5]. Their stake is simple: they want the Fed to put inflation ahead of propping up asset prices.

The other side starts from the gasoline number. Critics of more hikes say the 3.7% mostly reflects an energy shock from the Iran war. Gasoline rose 9.1% in September alone^[31]. Higher interest rates can't lower oil prices. They do raise the cost of mortgages, car loans and business credit.

Some economists add that Fed officials, including New York Fed President John Williams, have said there's time to gather data and no need to hurry. They conclude the bar for a hike is high. Hawks answer that energy-driven inflation can seep into wages and expectations if it lasts. They note that core PCE, the Fed's preferred gauge, is forecast to rise 3.1% over the year^[6].

Bank research mostly lands in the middle. TD Securities says an October hold makes a December hike more likely^[22]. ING calls the week "a pause before a December hike"^[23]. A pause lets the Fed see more data first.

The $800 billion question

The second story is about spending. The largest cloud companies, called hyperscalers, are expected to spend about $800 billion on capital projects this year, mostly on data centers^[1]. Capital spending is cash laid out now for buildings, chips and servers. Amazon alone raised its 2026 plan to $220 billion in July, citing higher memory costs^[15].

Bulls say the spending answers demand that can be measured. Amazon CEO Andy Jassy says AWS has sold out its 2026 capacity and largely sold out 2027^[17]. Google Cloud's backlog of signed contracts has passed $500 billion, and its revenue grew 82% in the second quarter, to $24.8 billion^[13][14]. AWS grew 37% to $42.2 billion, with a $496 billion backlog^[16]. A backlog is revenue customers have already promised to pay. On this view, building ahead of it is how you win a platform shift.

Skeptics say the bills arrive before the profits. Tech Insider cites a TMT Finance tally of earnings-call figures. By that count, Alphabet posted negative free cash flow of $5.9 billion, its first since its 2004 IPO^[18]. Free cash flow is the cash left after capital spending. The same tally says AI spending rose from 33% of hyperscalers' operating cash flow in 2023 to an estimated 93% in 2026^[18].

Reuters reports that investors are wary of mounting financing costs^[1]. Analysts at Yahoo Finance warn that for Microsoft, "even great may not be enough" if spending outpaces revenue^[26]. Analysts expect earnings per share of about $4.71–$4.72 at Microsoft, $3.03 at Alphabet and $1.96 at Amazon^[11][14][16].

Where the two stories meet

The two events are linked. If more of the buildout runs on borrowed money, each Fed hike makes it costlier. A quiet Fed makes the spending easier to fund. A hawkish signal on Wednesday could change how investors read the earnings on Wednesday night.

Nerves are already visible. The Nasdaq had its biggest one-day drop since June on Thursday, Oct. 22, after disappointing results from Meta and Lam Research^[1]. Reuters headlines the week as a pivotal test for a "rickety" AI rally^[1].

The Thursday data add a third input. Forecasters expect headline PCE prices to rise 0.5% in September, or 3.6% from a year earlier. Core is forecast at 0.3% for the month and 3.1% for the year^[6]. Third-quarter growth is forecast at roughly 3.0%–3.2% at an annual rate, depending on the survey. The Atlanta Fed's GDPNow model tracks 3.5%^[6][9]. Strong growth with hot inflation is the mix that supports the hawks.

One wording trap: some previews call the PCE release "October" data. It covers September. And the GDP number is the "advance" estimate, not a "preliminary" one^[6][8].

Same week, different lenses

Outlets frame the week differently. Reuters sources its worry but uses the loaded word "rickety" without saying who thinks so^[1]. CNBC's analysis leads with the less likely outcome: "Kevin Warsh could surprise them"^[20]. NBC News plays it straighter, stressing that Warsh is "focused on taming rising prices"^[21]. We found no New York Times or Washington Post preview.

Breitbart and Hot Air cast the week as a test of Warsh's resolve and say little about AI spending^[5][19]. Retail-investor sites like 24/7 Wall St. use words such as "mind-boggling" for capital spending while citing the $500 billion backlog^[13].

Asian coverage reads the week as a U.S. demand story for its own chip and memory stocks. Moomoo, a broker owned by Hong Kong-listed Futu, asks whether the market "questions the ROI of AI investments"^[25]. Forex.com argues AI earnings could matter more than the Fed or the Bank of Japan for the dollar-yen rate^[27]. AP reported Korean shares down more than 1% and the Nikkei down 0.4% during the week^[24]. China's fifth plenum, a major Communist Party meeting, runs Oct. 26–29^[2].

What the week can and can't settle

Some things won't change. The Fed's range is 3.75%–4.00%, and forecasters expect it to stay there until December^[3][4]. The roughly $800 billion is already committed^[1].

What the week can answer is narrower. Will Alphabet, Microsoft and Amazon raise or trim their spending plans? Is cloud revenue growing fast enough to justify them? And will Warsh say anything on Wednesday that moves December from likely to certain, or from likely to doubtful? One analyst site notes the meeting falls days before the November midterm elections^[30]. Warsh has said he won't hint at the answer.