🏆Gold Medal Finance | Countdown to the Fed decision: the world is watching this early morning

1️⃣ The Fed meets today and tomorrow, with its rate decision due at 2 a.m. Beijing time this Thursday and Chair Warsh holding a press conference at 2:30 a.m. This is the first meeting since September’s 25-basis-point rate hike. The current rate range is 3.75% to 4.00%.
2️⃣ Markets broadly expect the Fed to hold steady, with the probability of no change at around 90% and that of a 25-basis-point hike at around 10%. There will be no dot plot or economic projections this time; the real signals will be in the statement’s wording and Warsh’s remarks.
3️⃣ The real focus is December: all economists in an institutional survey expect a December rate hike, and markets have priced in a nearly 70% chance of one. On Thursday, listen for whether Warsh leaves the door open to another December hike and whether any committee members dissent in favor of raising rates.
4️⃣ The backdrop is tightening: US one-year inflation expectations have risen to 4.7%, their highest since May; Brent crude is above $100; the 10-year Treasury yield is nearing 5%; and gold has climbed above $4,000.
5️⃣ Two other major events are also on Thursday: at 20:30, the US advance estimate of third-quarter GDP and September core PCE will be released. The European Central Bank announces its decision the same day, with the Bank of Japan following soon after; earnings from tech giants including Microsoft, Alphabet, and Amazon are also concentrated over these two days.
6️⃣ For risk assets, volatility is likely to rise sharply around the release of the decision and PCE data. The crypto market often makes a sharp wick move first, then picks a direction, so be prepared for either outcome in advance.