1. The minutes of the September meeting, not a new rate decision, will be released at 2 a.m. Beijing time on October 8. In September, the Fed unanimously raised rates by 25 basis points to 3.75%–4.00%. The median dot plot pointed to one more hike by year-end, bringing rates to 4.1%.
2. Data released since the meeting have already changed the outlook. Nonfarm payrolls rose by just 29,000, and the unemployment rate climbed to 4.2%. The probability of an October rate hike fell to around 22%, but the probability of at least one more hike in December remains around 87%.
3. If the minutes stress that inflation remains stubborn and that an October hike is still on the table, short-term interest rates and the dollar will be repriced. If they merely confirm that the Fed can leave a longer gap between hikes, volatility will be limited and the baseline outlook will remain unchanged.
4. My view: The minutes will lean hawkish, but they won't change the main scenario of “a pause in October, followed by another hike in December.” The focus for traders is on rates staying higher for longer, not a return to rate cuts.
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2. Data released since the meeting have already changed the outlook. Nonfarm payrolls rose by just 29,000, and the unemployment rate climbed to 4.2%. The probability of an October rate hike fell to around 22%, but the probability of at least one more hike in December remains around 87%.
3. If the minutes stress that inflation remains stubborn and that an October hike is still on the table, short-term interest rates and the dollar will be repriced. If they merely confirm that the Fed can leave a longer gap between hikes, volatility will be limited and the baseline outlook will remain unchanged.
4. My view: The minutes will lean hawkish, but they won't change the main scenario of “a pause in October, followed by another hike in December.” The focus for traders is on rates staying higher for longer, not a return to rate cuts.
$BTC
$ETH