- Prior range was 4.00-4.25%
- A 25 bps rate cut was fully priced in
- Miran dissented for 50 bps
- Schmid dissented for unchanged
- Repeats that job gains have slowed this year and that unemployment rate remained low
- Says recent indicators consistent with outlook
- Repeats that inflation has moved up since earlier in the year and remains somewhat elevated
- To conclude aggregate balance sheet drawdown on Dec 1
- Beginning in Dec will reinvest all MBS principal payments into T-bills
Prior to the decision, the Fed curve was pricing in 112.5 bps in easing through year end 2026.
The economic outlook in the report has some changes in language due to the lack of economic data because of the government shutdown:
Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.
I don't see much in the way of changes in communication here so we will have to wait for Powell.
