At 2 a.m. tonight, we’ll take a look at the September meeting minutes.
There’s still a slightly higher chance they’ll sound hawkish. After all, the Fed had just raised rates by 25 bps in September, and officials as a whole weren’t particularly dovish at the time.
But one thing to keep in mind:
The minutes reflect the Fed’s thinking back in September, not now.
The data has changed over the past two weeks: nonfarm payrolls came in at 29,000, the unemployment rate was 4.2%, and the labor market is clearly starting to cool. The market wasn’t pricing in much chance of another rate hike in October anyway.
So even if the minutes sound hawkish tonight, that doesn’t necessarily mean markets will sell off.
If they just repeat the usual lines—that inflation is still high and further rate hikes remain possible—the market has already anticipated that.
What really matters is whether the minutes show that many officials already favored another hike in October. That would be genuinely new and negative news.
The minutes could sound pretty hawkish tonight, but the market may not actually be worried.
See you tonight in the Binance Square livestream.
There’s still a slightly higher chance they’ll sound hawkish. After all, the Fed had just raised rates by 25 bps in September, and officials as a whole weren’t particularly dovish at the time.
But one thing to keep in mind:
The minutes reflect the Fed’s thinking back in September, not now.
The data has changed over the past two weeks: nonfarm payrolls came in at 29,000, the unemployment rate was 4.2%, and the labor market is clearly starting to cool. The market wasn’t pricing in much chance of another rate hike in October anyway.
So even if the minutes sound hawkish tonight, that doesn’t necessarily mean markets will sell off.
If they just repeat the usual lines—that inflation is still high and further rate hikes remain possible—the market has already anticipated that.
What really matters is whether the minutes show that many officials already favored another hike in October. That would be genuinely new and negative news.
The minutes could sound pretty hawkish tonight, but the market may not actually be worried.
See you tonight in the Binance Square livestream.
