The Fed speaks in minutes. Markets move in milliseconds. 2 things on Wednesday can still move them.
A December hike is already about 88% priced, so the headline is old news. The minutes (the Fed's written record of its Oct 27-28 meeting) drop Nov 18 at 19:00 UTC, and that meeting happened BEFORE the hot jobs and inflation data.
The timeline:
> Sept 16: the Fed hiked to 3.75%-4.00%, first in about three years.
> Oct 28: it held, 10-2. Cook and Hammack wanted another hike. Chair Warsh called the room a serious family fight (per Schwab).
> Nov 6: October jobs came in at +165,000, over twice the forecast (per CryptoTicker).
> Nov 10: October inflation (CPI) beat forecasts (per Investing(.)com).
Now the market. Per CME FedWatch (via Investing(.)com), a December hike of 25 bp is about 88%, a 50 bp hike about 11%, and a hold is not priced at all. (A basis point is 0.01%, so 25 bp is a quarter point.) Bitcoin has been sliding on these hike bets.
So the minutes are an old photo. Traders moved on. What can still surprise?
- The size: how many officials talked about 50 bp instead of 25. Governor Waller reportedly said 50 bp should be considered.
- The path: how many see more hikes after December. Warsh reportedly avoids forward guidance, so the minutes are one of the few windows into the room.
- A minor third, the mood: "patient" language reads soft, but the hot data came after, so it carries less weight.
Here is my plan:
- If the minutes show many already wanted to hike in October, the 50 bp odds could grow.
- If most sounded patient, hike odds might slip a little, though newer data limits that.
- If it all sounds familiar, expect a shrug and eyes on the Dec 9 decision.
What I take notes from it:
- Priced in means the news is already inside the odds. Surprise = news minus the odds.
- Minutes record a past meeting, not a new decision.
- Look at the gaps (size and path), not the word "hike".
What do you expect on Wednesday?
Experience, not financial advice. $BTC
#WillFOMCMinutesReinforceRateHikeExpectations?
A December hike is already about 88% priced, so the headline is old news. The minutes (the Fed's written record of its Oct 27-28 meeting) drop Nov 18 at 19:00 UTC, and that meeting happened BEFORE the hot jobs and inflation data.
The timeline:
> Sept 16: the Fed hiked to 3.75%-4.00%, first in about three years.
> Oct 28: it held, 10-2. Cook and Hammack wanted another hike. Chair Warsh called the room a serious family fight (per Schwab).
> Nov 6: October jobs came in at +165,000, over twice the forecast (per CryptoTicker).
> Nov 10: October inflation (CPI) beat forecasts (per Investing(.)com).
Now the market. Per CME FedWatch (via Investing(.)com), a December hike of 25 bp is about 88%, a 50 bp hike about 11%, and a hold is not priced at all. (A basis point is 0.01%, so 25 bp is a quarter point.) Bitcoin has been sliding on these hike bets.
So the minutes are an old photo. Traders moved on. What can still surprise?
- The size: how many officials talked about 50 bp instead of 25. Governor Waller reportedly said 50 bp should be considered.
- The path: how many see more hikes after December. Warsh reportedly avoids forward guidance, so the minutes are one of the few windows into the room.
- A minor third, the mood: "patient" language reads soft, but the hot data came after, so it carries less weight.
Here is my plan:
- If the minutes show many already wanted to hike in October, the 50 bp odds could grow.
- If most sounded patient, hike odds might slip a little, though newer data limits that.
- If it all sounds familiar, expect a shrug and eyes on the Dec 9 decision.
What I take notes from it:
- Priced in means the news is already inside the odds. Surprise = news minus the odds.
- Minutes record a past meeting, not a new decision.
- Look at the gaps (size and path), not the word "hike".
What do you expect on Wednesday?
Experience, not financial advice. $BTC
#WillFOMCMinutesReinforceRateHikeExpectations?
