🚨 FED HOLDS — BUT 2 OFFICIALS WANTED A HIKE
The Fed kept rates at 3.75%–4.00% today in a 10–2 vote. Governor Lisa Cook and Cleveland Fed's Beth Hammack dissented in favor of a 25 bp hike. The statement says inflation "remains elevated" and upgrades growth to "strong." The 10Y yield climbed to ~5.05%, and futures now price ~86% odds of a December hike.
🟢 Bull case: No surprise, the S&P 500 is within ~1% of its record, and under Chair Warsh the S&P has rallied 1%+ the day after every meeting so far. A cool PCE print Thursday could cap yields.
🔴 Bear case: A 5%+ 10Y yield and a hawkish split mean tighter financial conditions. If PCE runs hot, a December hike looks locked in and rich valuations get tested.
Is the Fed done, or is December's hike a done deal? 👇
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