On October 7 at 21:00 MSK, the minutes of the September FOMC meeting were published. The main signal of the document - the majority of committee participants consider another rate hike appropriate before the end of 2026. The decision on the September hike itself was made unanimously.
What the Fed decided in September
At the meeting on September 15-16, the Fed raised the base rate by 0.25 percentage points. The new range was 3.75-4.00%. This was the first rate change since 2023. Most participants consider another step up likely before the end of the year.
Why the Fed maintains its hawkish stance
Some participants pointed to the risk of a new acceleration in inflation. Several representatives also noted that the current rate level either restrains the economy very weakly or has virtually no restrictive effect. This means that within the committee, readiness remains to further tighten monetary policy if inflation remains high.
Why the market barely reacted
The minutes brought no fundamentally new signals to the market. Back on September 16, the Fed's median forecast assumed another rate hike before the end of the year. This scenario was priced in by 16 of 18 leadership participants. Therefore, the published document mainly confirmed the regulator's already known position.
What changed after the meeting itself
The minutes do not account for labor market data that came out later. In September, the US economy created about 29 thousand jobs against expectations of about 90 thousand. The unemployment rate rose to 4.2%. These figures could become an argument against too rapid further rate hikes.
How the markets reacted
The S&P 500 after publication remained around 7,801 points, virtually unchanged. Gold traded around $4,110 per ounce, although before publication it had risen to about $4,125. Bitcoin on Binance briefly rose from $83,159 to $83,306, after which it pulled back. The yield on 10-year US Treasuries was around 5.27%. The 30-year yield declined from a recent high of 5.73% to about 5.66%. WTI dropped to about $88.48 per barrel.
What the market expects from October
After the publication of the minutes, traders lowered the probability of a rate hike at the October meeting to about 20%. A week earlier, the market had estimated it at about 55%. Thus, the main scenario for October now assumes a pause.
What's next
The next important reference point will be September inflation data. Additional attention is drawn to US consumer inflation expectations, which have already risen to their highest since 2023. If actual inflation remains high, the probability of another rate hike before the end of the year may increase again.
Did you keep the terminal open at 21:00?
Fed publications can cause sharp moves in the dollar, gold, indices, and cryptocurrencies. In prop trading, it is important to take into account the rules of the specific program. In some places, entering directly before important news is prohibited, in others there are no restrictions, and the calculation of daily drawdown may depend on the balance or the maximum account value. Such conditions are best checked in advance, before the next Fed meeting.