Despite advice from experts to ignore Fed speak and to focus on economic data, markets have reacted to the latest FOMC minutes and investors have now upped their expectations for the next rate hike.
Following the release of the latest minutes Wednesday, Gold sold off some $13, while U.S. equity markets also saw selling pressure. However, stocks have since paired gains somewhat dismissing the latest Fed stance.
And based on CME’s FedWatch Tool, markets are now pricing in a 45.5% chance of a rate hike in December.
For November, investors have upped it even more. Yesterday, markets were pricing in a 16.4% chance for a rate hike in Nov, but post-FOMC, they're looking at a 19.3% chance.
Key MINUTES highlights from veteran strategist George Gero:
*SOME FOMC VOTERS SAW RATE HIKE WARRANTED SOON
*SEVERAL FED OFFICIALS WANTED TO WAIT FOR MORE INFL. CONFIDENCE
*FOMC VOTERS AGREED TO WAIT FOR MORE DATA TO GAUGE ECONOMY
*MOST FED OFFICIALS SAW LOW INFL. RISK FROM CONTINUED JOB GAINS
*FOMC VOTERS DIVIDED ON WHETHER JOB-GAIN PACE WORRISOME
Has the tide REALLY turned?
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