- Prior range was 4.25-4.50%
- Miran voted for 50 bps
- No other dissents
- Repeats that activity moderated in the first half
- Adds that 'job gains have slowed' and removes that unemployment 'remains low' to say it 'edged'
- Fed median forecast shows two more cuts this year but end-2026 and beyond forecasts unchanged
- Statement says 'inflation has moved up and remains somewhat elevated' vs 'inflation remains somewhat elevated' prior
The lack of other dissents is partly notable as Weller or Bowman could have stepped out along with Miran. It sends a message of unity aside from Miran, which isn't a surprise.
Ahead of the decision, the market was fully priced for a 25 bps cut with just a 3% implied chance of a 50 bps surprise. For October, the market was priced at 79% for a second 25 bps cut and for year end, 66.9 bps in total easing was priced in. Looking deeper out the curve, a full 125 bps was priced in at the July 2026 meeting.
USD/JPY was trading at 146.29 ahead of the decision, 2-year yields were at 3.543% and 30s were at 4.65%. The S&P 500 was trading down 7 points to 6599, gold was at $3689 and bitcoin was at $116,092.
Immediately after the decision, USD/JPY has fallen to 145.65, two year yields are down to 3.476% and 30s are at 4.61%. The S&P 500 is now down 2 points to 6603 after an initial pop faded, gold touched a record $3700 for the first time and bitcoin has dipped to $115,877.
