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The Fed faces risk from multiple directions and is experiencing a high level of uncertainty. Our baseline scenario sees the hawks mostly unchanged and the doves to consolidate towards two cuts for 2025.

If you enjoy our content and would like to support our work, we offer a premium, high-frequency macro research service, Macro Suite. If you’re interested in gaining access, please feel free to reach out to us here for more information. What To Expect Very little. The Fed signaled a

If there’s one takeaway from this meeting, it’s that the Committee wants to position themselves much more cautiously on the inflation outlook, but the Fed is just a couple of bad labor market prints from having to put more cuts back on the table.

Now that rate normalization is about to move into the next, slower phase, it is important that they do not predetermine the scale of normalization.

After the excitement at the September meeting,  November is going to be relatively less exciting.

“The time to support the labor market is when it’s strong, and not when you begin to see layoffs.”

Our new baseline is a 50 bps cut with a total of 75 bps of cuts in the SEP for 2024. It’s a close call but we think a 50 bps cut is more likely than a 25 bps cut. We think a 50 bps point cut is the right move.