With fears of rising unemployment falling a bit with the September jobs data, the Committee's focus shifts back a bit towards inflation. As with before the September rate cut, the Committee is divided in its confidence around inflation's path back to 2%.
We had some Fedspeak this week but mostly people stuck to their previous views.
With labor market risk rearing its head, Kashkari and Bostic sound dovish again.
A little bit of post-game analysis from Bowman and Waller. Waller defends 50 by pointing to the implications of the CPI and PPI data received during blackout period for core PCE.
Our new baseline is a 50 bps cut with a total of 75 bps of cuts in the SEP for 2024. It’s a close call but we think a 50 bps cut is more likely than a 25 bps cut. We think a 50 bps point cut is the right move.
