The Fed left the policy rate unchanged at a range of 5.25-5.5%.

Thinking about future meetings, Powell said that they he believes policy is restrictive and is working to bring down economic activity and inflation. But, he also said that they do not know whether the current policy rate is sufficiently tight enough to bring down inflation to 2% over time. And he also said that the risk of doing too much versus not enough in the fight against inflation was more in balance today. He was asked directly if there was a tightening bias on the committee for the December meeting. He refused to answer this question, but his body language seemed to indicate that there was a bias and markets did react and give back some of their gains at this point in the press conference. Throughout the rest of the presser, he seemed to try to walk back that nuanced indication of maybe a bias toward hawkishness on the committee.

There was more mention of geopolitical and other risks more at this meeting than in the past as well. More concern here would mean more dovish stance for the Fed.

Fed Funds are up indicating the market believes this is a more dovish Fed. Longer term rates continued their decline as well.

 

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