Overview
- The Federal Open Market Committee is expected to lower the federal funds rate by 25 basis points to a 3.75%–4.00% target range on Oct. 29, with futures placing near‑certain odds on the move.
- Traders also assign high probabilities to another reduction in December, even as several officials have signaled caution about pre‑committing without fresh economic readings.
- A month‑long government shutdown has delayed the September jobs report and slowed other releases, leaving policymakers to lean on private indicators after CPI came in near 3% year over year.
- Internal divisions are sharpening, with Governor Stephen Miran advocating a larger 50‑basis‑point cut and other policymakers preparing possible hawkish dissents or urging a slower pace beyond October.
- Investors are focused on whether the Fed will soon halt balance‑sheet runoff, with Chair Jerome Powell having suggested the end of quantitative tightening could come in the months ahead and the balance sheet now near $6.6 trillion.