The Fed held

The Fed held. The real decision is still ahead.

The FOMC kept the target range at 3.75%–4% by a 10–2 vote, with Cook and Hammack preferring a 25 bp hike. Chair Warsh also announced that one meeting a year will become a strategy session with no rate vote, starting in 2027.

Market reaction: a hawkish hold that traded dovish.

• The 2-year yield dipped as low as 4.678% after Warsh declined to give a clear steer on December.

  
  

• Equities rallied modestly, though narrowly, while the 10-year closed above 5% and a December hike is priced at roughly 85%.

  
  

• WTI settled near $103 and gold slipped to about $4,039.

  
  

The midterms angle. Cost of living is dominating the debate, and mortgage rates hit a three-year high of 7.4% this month. Warsh said politics played no role in the decision. Whatever the intent, the Fed is deciding in the middle of an election campaign, and every data point will be read through that lens.

Today's PCE sets up December. Consensus is headline +0.5% m/m, with core around +0.3%.

• Core in line or hotter: the December hike looks nearly locked in, with yields and the dollar higher.

  
  

• Core at 0.2%: the energy-driven story gets support and the hike case weakens.

  
  

Next stops are December 9 and January 27. The market is trading less on what the Fed said than on what it didn't promise.

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