The Federal Reserve held the federal funds target at 3.75% to 4% on Wednesday, and two of the twelve voters wanted another quarter-point increase. The statement said economic activity is expanding at a strong pace, with resilient spending, strong productivity, robust capital investment and job gains keeping pace with the workforce. The unemployment rate changed little. Uncertainty remains elevated, in part because of geopolitical developments. On prices the line was direct: inflation remains elevated, and "the Committee will deliver price stability." The Crypto Times described the 10-2 split as the first time in decades a governor and a regional president dissented together on the same side of a rate decision. This meeting had no new projections. It followed September's first hike since 2023, the move markets had priced after the 3.7% September CPI.
Warsh would not call conditions tight, and he would not preview December
Chair Kevin Warsh said conditions had begun to change since September and that "market participants are becoming somewhat more discerning in their capital allocations." He added: "While overall financial conditions are tighter, I'm unwilling and unable to call them tight." His prepared remarks, as carried by Unchained, did not mention crypto. He repeated the 2% inflation goal and pointed to resilience in private spending and the labour market, Investing.com reported. CME FedWatch, on that desk's reading, priced a December hike near 79.8%, up from 73.4% a week earlier. A Fox Business update cited by Unchained put the odds at 82.6%, from 78.3% a day earlier. The next meeting is 8 to 9 December. Investing.com said the 10-year Treasury yield was back above 5% after a brief surge. A Bloomberg wrap said the two-year yield fell two basis points to 4.68% as shorter maturities rallied for a second day.
PCE at 8:30 a.m. ET is the next print that can move the odds
Thursday brings the September Personal Income and Outlays report, including the PCE price index, and the advance estimate of third-quarter GDP, both at 8:30 a.m. ET. PCE is the gauge the Committee watches between CPI releases. A hot reading would support Cook and Hammack. A cooler one would test the jump in December odds. The European Central Bank decides later Thursday and the Bank of Japan on Friday. Both are expected to hold. Bitcoin's slip back toward $80,100 is in today's market lead. Gold near $4,030 and the softer oil tape are in the commodities update. Read the rest of the rates coverage on the economy desk.