FOMC Preview

We expect the dots to move upwards, with most members that projected cuts in December taking a cut out of their projections. We see the median on the knife-edge, with half of the Committee projecting no cuts.

We expect the dots to move upwards, with most members that projected cuts in December taking a cut out of their projections. We see the median on the knife-edge, with half of the Committee projecting no cuts.

This has been one of the most telegraphed meetings in a while, as pretty much every FOMC member, from hawk to dove, has signaled their intent to hold rates for the near future, barring visible labor market stress.

This has been one of the most telegraphed meetings in a while, as pretty much every FOMC member, from hawk to dove, has signaled their intent to hold rates for the near future, barring visible labor market stress.

We expect the rate cut to be accompanied with a strong preference for optionality to  pause at the next meeting, with no clear commitments to further cuts anytime soon. Our baseline case has the median projection at 2 more cuts in 2026, but with nine members projecting no more than one cut.

We expect the rate cut to be accompanied with a strong preference for optionality to  pause at the next meeting, with no clear commitments to further cuts anytime soon. Our baseline case has the median projection at 2 more cuts in 2026, but with nine members projecting no more than one cut.

With the government shutdown, the intermeeting period did not have enough data to deter the Fed from cutting by 25bps again in October.

After a sufficiently worrying jobs report, a 25bp cut at next week’s meeting is a lock—with a slight possibility of a 50bp cut.

After a sufficiently worrying jobs report, a 25bp cut at next week’s meeting is a lock—with a slight possibility of a 50bp cut.