The FOMC statement and presser resulted in a reduced expectation that the Fed will hike rates in December – the final meeting for the year. Jerome Powell attempted to keep the door open for another rate hike after expressing that the majority of the committee foresee a greater probability of another rate hike before rate cuts appear on the horizon. Outperformance in US data poses upside risks to inflation, something the Fed has used to avoid any notion that interest rates are at their peak. This is because the Fed understands that once markets know we’re at a peak, they will start to price in rate cut, loosening financial conditions.
