The changes to the meeting schedule will affect the future, not the one in December.
The market has already priced it in.
According to Warsh’s remarks at the press conference after the policy meeting, the changes will be phased in starting next year: in 2027, one of the eight meetings will become a strategic discussion with no interest-rate vote; in 2028, that number will rise to two, bringing the number of meetings that make rate decisions each year down to six. The rationale is to allow more data to accumulate between meetings.
But bond traders are already pricing in a roughly 90% chance of a December rate hike. The vote at this meeting was 10 to 2 in favor of holding rates steady—the data haven’t had time to accumulate, but the market has already priced it in.
This assessment would no longer hold if the probability priced in for December falls significantly from around 90%, or if the meeting reforms are delayed.
#TheFedWillReduceTheNumberOfRateMeetingsStartingIn2027
The market has already priced it in.
According to Warsh’s remarks at the press conference after the policy meeting, the changes will be phased in starting next year: in 2027, one of the eight meetings will become a strategic discussion with no interest-rate vote; in 2028, that number will rise to two, bringing the number of meetings that make rate decisions each year down to six. The rationale is to allow more data to accumulate between meetings.
But bond traders are already pricing in a roughly 90% chance of a December rate hike. The vote at this meeting was 10 to 2 in favor of holding rates steady—the data haven’t had time to accumulate, but the market has already priced it in.
This assessment would no longer hold if the probability priced in for December falls significantly from around 90%, or if the meeting reforms are delayed.
#TheFedWillReduceTheNumberOfRateMeetingsStartingIn2027
