#美联储纪要聚焦10月暂停加息
The odds of an October rate hike plunged from 51% to 19% in a week, but the Fed’s own minutes pointed in another direction 🦖
⚡ 有大动静群里说
The minutes of the Fed’s September meeting, released on October 7, laid bare the divide in the market. Of the 18 officials who submitted economic projections, 16 thought another rate hike would be needed this year. In other words, the September 16 hike wasn’t the last move in this cycle.
But the document never made clear whether that second hike would come at the October 28 meeting or the December 9 meeting 📅
First, some context: On September 16, the Fed raised its benchmark interest rate by 25 basis points, to a range of 3.75%–4.00%. It was the first rate hike since July 2023, and the decision was unanimous. The minutes said that “most participants” considered another increase by year-end likely to be appropriate. Chair Warsh described the move at his press conference as withdrawing a dose of monetary easing. Since taking office in May, he hasn’t submitted his own projections.
That’s the issue: The message was forceful, but no timing was given. Officials stressed that they approach every meeting with an open mind and that decisions depend on incoming data. In other words, the question is no longer whether they’ll hike, but when ⚖️
So why doesn’t the market believe it? Because the data changed over the past week. The Fed’s favored inflation gauge, core PCE, came in at 3.0% in August, while headline PCE was 3.4%. Both are still well above the 2% target, but they were much lower than expected. Traders’ bets on an October hike dropped from 51% to 19% in a week—a very sharp shift.
Here’s the contrarian take I’m seeing: Many people are reading “an October hike is unlikely” as “the hiking cycle is over.” But the minutes are actually saying the opposite. It’s not over; the hike has just been pushed back. The real variable isn’t inflation data, but the bond market. Yields on 10- and 30-year Treasuries have climbed to their highest levels since 2002. The bond market has effectively tightened financial conditions ahead of the Fed, which actually gives it a reason to hold steady.
For crypto markets, the interest-rate path is practically the switch that controls liquidity. Bitcoin is now at $83,395, down 2.5% over 24 hours. Ethereum is at $2,562, down 4.7%. The clearer the prospect of rates peaking, the more reason there is for valuations that have been under pressure for a year to breathe a sigh of relief. But as long as a December hike is still on the table, any rebound will feel like it’s behind a pane of glass.
My view: The Fed will most likely hit pause in October, but that won’t be the end. December is the real test in this cycle 💥
Do you think the Fed will pause in October, or make up for it with a hike in December? Let’s talk in the comments.
Tap my profile picture to watch the livestream.
Every day, I’ll bring you the latest Fed policy updates—not just what’s happening, but the logic and opportunities behind it 👀🚀
The odds of an October rate hike plunged from 51% to 19% in a week, but the Fed’s own minutes pointed in another direction 🦖
⚡ 有大动静群里说
The minutes of the Fed’s September meeting, released on October 7, laid bare the divide in the market. Of the 18 officials who submitted economic projections, 16 thought another rate hike would be needed this year. In other words, the September 16 hike wasn’t the last move in this cycle.
But the document never made clear whether that second hike would come at the October 28 meeting or the December 9 meeting 📅
First, some context: On September 16, the Fed raised its benchmark interest rate by 25 basis points, to a range of 3.75%–4.00%. It was the first rate hike since July 2023, and the decision was unanimous. The minutes said that “most participants” considered another increase by year-end likely to be appropriate. Chair Warsh described the move at his press conference as withdrawing a dose of monetary easing. Since taking office in May, he hasn’t submitted his own projections.
That’s the issue: The message was forceful, but no timing was given. Officials stressed that they approach every meeting with an open mind and that decisions depend on incoming data. In other words, the question is no longer whether they’ll hike, but when ⚖️
So why doesn’t the market believe it? Because the data changed over the past week. The Fed’s favored inflation gauge, core PCE, came in at 3.0% in August, while headline PCE was 3.4%. Both are still well above the 2% target, but they were much lower than expected. Traders’ bets on an October hike dropped from 51% to 19% in a week—a very sharp shift.
Here’s the contrarian take I’m seeing: Many people are reading “an October hike is unlikely” as “the hiking cycle is over.” But the minutes are actually saying the opposite. It’s not over; the hike has just been pushed back. The real variable isn’t inflation data, but the bond market. Yields on 10- and 30-year Treasuries have climbed to their highest levels since 2002. The bond market has effectively tightened financial conditions ahead of the Fed, which actually gives it a reason to hold steady.
For crypto markets, the interest-rate path is practically the switch that controls liquidity. Bitcoin is now at $83,395, down 2.5% over 24 hours. Ethereum is at $2,562, down 4.7%. The clearer the prospect of rates peaking, the more reason there is for valuations that have been under pressure for a year to breathe a sigh of relief. But as long as a December hike is still on the table, any rebound will feel like it’s behind a pane of glass.
My view: The Fed will most likely hit pause in October, but that won’t be the end. December is the real test in this cycle 💥
Do you think the Fed will pause in October, or make up for it with a hike in December? Let’s talk in the comments.
Tap my profile picture to watch the livestream.
Every day, I’ll bring you the latest Fed policy updates—not just what’s happening, but the logic and opportunities behind it 👀🚀
