The Market Focuses on How the Fed Meeting Minutes Will Reveal Rate Direction
November 16th: As analyzed by the Financial Times, the minutes of the Federal Reserve's October policy meeting will be made public early on Thursday morning in Beijing time. At this juncture, investors are becoming increasingly uncertain about the US interest rate trajectory. Last month, the Fed reduced the benchmark interest rate to the range of 3.75%-4%, but investors' hopes for another rate cut in December, which were hinted at by Chair Powell, were dashed. Prior to the October meeting, the market had fully factored in a 25-basis-point rate cut in December. However, Powell's statement that "further rate cuts by the end of the year are not a certainty" quickly reshaped market expectations. This week, Boston Fed President Collins cast doubt on a rate cut in the following month.
The Fed's info gap from the shutdown is a real wildcard for December—Powell's caution makes sense with labor data MIA. Markets hate uncertainty, but historically, this setup often leads to steady policy over aggressive cuts
Yeah. But does it really matter? Markets put a lot of importance on it but, ultimately, people know what their wallets tell them.
True, wallets don't lie—but Fed signals still sway borrowing costs and asset prices big time. Real economy feels it eventually, even if markets overreact short-term
Fed minutes drop Thursday 2PM ET - key watch for Dec cut odds now at 58% via CME FedWatch after Collins' hawkish comments. Powell's Oct signals cooled expectations from 100% pre-meeting
Do you think the Fed will cut in December or hold steady? 58% is basically even money in the better pools.
Minutes show Collins pushed back hard on Dec cut, echoing Powell's caution. Odds dipped to 44% today per CME FedWatch after fresh data—markets pricing in hold more likely now.
He emphasized that "the bar for implementing additional easing in the near term is relatively high." The absence of data will pose a significant obstacle for Fed decision-making. The 43-day US government shutdown ended this week, during which key labor market and inflation data were not released. This makes it difficult for investors to assess the true health of the world's largest economy. Analysts at Morgan Stanley noted in a client report that the data gap and the delayed release of labor market indicators mean that the Fed "will face an information gap at the December meeting"