Here’s why you should wear a “Make Fed Speeches Great Again” hat

The cruise into 2025 with two more Fed rate cuts has hit a bit of a (small) pothole.

Firstly, that inflation data … it has raised eyebrows over the potential for reflationary pressure:

• hot numbers … US September CPI 2.4% y/y versus 2.3% expected
• 0.554% gain for supercore was the 3rd largest monthly increase over the last two years

It was somewhat watered down by the higher jobless claims numbers – the hurricane was a key factor here, but Greg raised a good point:

• the largest increases in the initial claims are not centered on those states impacted by the storm or the strike

Jury is out.

Secondly … Bostic raised the idea of only one Fed rate cut to come for the balance of this year:

• Bostic is at it again – suggests ‘totally comfortable’ with a November Fed pause
• Implied odds of a Fed pause in November rise to 22% after Bostic. Euro hits two-month low
• Fed’s Bostic says he’s open to pausing rate cut at the November meeting

Bostic was the first to hose down expectations of Fed rate cuts in the early part of this year when nearly everyone was screaming for 6 or 7 cuts this year.

Anyway, Fed speeches have become interesting again.

This article was written by Eamonn Sheridan at www.forexlive.com.