It's been an 'eventful' six weeks since The Fed decided (on Sept 18th) to slash interest rates by 50bps.
The macro-economic data has literally exploded stronger...
Source: Bloomberg
...with inflation reigniting and growth surprises soaring...
Source: Bloomberg
...and that has slammed rate-cut expectations down by over 100bps...
Source: Bloomberg
Which has helped lift gold and stocks while crude prices have collapsed (and Bitcoin has gone vertical)...
Source: Bloomberg
But, more problematically, the mortgage rate has ripped higher since The Fed cut...
Source: Bloomberg
The market is fully priced for 25bps cut today, but December is now a coin-toss (54% odds of another 25bps).
Will The FOMC (and Powell's presser) jawbone expectations down further? Will Bowman dissent again?
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*FED LOWERS BENCHMARK RATE 25 BPS TO 4.5%-4.75% RANGE
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*FED SAYS RISKS TO GOALS REMAIN 'ROUGHLY IN BALANCE'
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*FED: LABOR MARKET CONDITIONS HAVE 'GENERALLY EASED'
No dissent on this rate-cut decision.
Key changes:
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Most notably, removing language that Fed has "gained greater confidence that inflation is moving sustainable toward 2 percent".
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Adding that labor market conditions have "generally eased" since earlier in the year, replacing "job gains have slowed".
Read the full redline below:
