It’s been an ‘eventful’ six weeks since The Fed decided (on Sept 18th) to slash interest rates by 50bps.

The macro-economic data has literally exploded stronger…

Source: Bloomberg

…with inflation reigniting and growth surprises soaring…

Source: Bloomberg

…and that has slammed rate-cut expectations down by over 100bps…

Source: Bloomberg

Which has helped lift gold and stocks while crude prices have collapsed (and Bitcoin has gone vertical)…

Source: Bloomberg

But, more problematically, the mortgage rate has ripped higher since The Fed cut…

Source: Bloomberg

The market is fully priced for 25bps cut today, but December is now a coin-toss (54% odds of another 25bps).

Will The FOMC (and Powell’s presser) jawbone expectations down further? Will Bowman dissent again?

So what did The Fed do?

• *FED LOWERS BENCHMARK RATE 25 BPS TO 4.5%-4.75% RANGE

• *FED SAYS RISKS TO GOALS REMAIN ‘ROUGHLY IN BALANCE‘

• *FED: LABOR MARKET CONDITIONS HAVE ‘GENERALLY EASED‘

No dissent on this rate-cut decision.

Key changes:

• Most notably, removing language that Fed has “gained greater confidence that inflation is moving sustainable toward 2 percent”.

• Adding that labor market conditions have “generally eased” since earlier in the year, replacing “job gains have slowed”.

Read the full redline below: