The whole debate flipped overnight, and not because a single data point changed. A week ago the question was whether the Fed would hike at all. Today October sits at 49.8% on CME, cumulative 50bp for the year is 66% on Polymarket, and Goldman abandoned its pause call for a live October hike inside a single trading day.
What moved all of that was a tone of voice. Warsh called Wednesday's hike a removal of "a dose of accommodation" and kept calling inflation "too high." Decode it: he's telling you he doesn't believe policy is even restrictive yet. A central banker who thinks he's still stimulating the economy is not one who's finished tightening.
And here's what actually changed for you — the burden of proof flipped. A month ago the bulls had to argue that hikes were coming. Now the burden is on anyone claiming they stop, and I have yet to hear one name the specific print that produces the pause. "Inflation cools" isn't an answer when the chairman has told you he'll only believe it at 2%, "clearly and sufficiently quickly."
50% is not a signal. It's a coin flip with a press release. The tell is whether October holds above 50 as real data lands, or fades like every hike scare did this summer. Watch US2Y — the front end votes with money, not opinions. #Fed #rates
What moved all of that was a tone of voice. Warsh called Wednesday's hike a removal of "a dose of accommodation" and kept calling inflation "too high." Decode it: he's telling you he doesn't believe policy is even restrictive yet. A central banker who thinks he's still stimulating the economy is not one who's finished tightening.
And here's what actually changed for you — the burden of proof flipped. A month ago the bulls had to argue that hikes were coming. Now the burden is on anyone claiming they stop, and I have yet to hear one name the specific print that produces the pause. "Inflation cools" isn't an answer when the chairman has told you he'll only believe it at 2%, "clearly and sufficiently quickly."
50% is not a signal. It's a coin flip with a press release. The tell is whether October holds above 50 as real data lands, or fades like every hike scare did this summer. Watch US2Y — the front end votes with money, not opinions. #Fed #rates
