The big event tomorrow is the US election, a what to expect here:
And, an earlier Fed FOMC preview here:
Adding this in now, via RBC on the Fed:
We look for the upcoming FOMC to be largely a non-event (as is typical with non-press conference meetings).
No change to the policy range of 2.00-2.25% is widely anticipated, but there is some question as to whether the Fed will cut IOER by 5bps at this meeting. We think this is highly unlikely for two reasons.
- 1) A -5 bps adjustment will be a de facto interest rate cut and thus the messaging from this will be confusing since the committee looks poised to hike in December. It might also be perceived as the Fed placating either the equity markets or the administration. Neither of which they want to do at this juncture.
- 2) The more technical reason is that the Fed is getting close to the limit on how close IOER and RRP can get without creating stress, so they probably want to go slowly on the compression. Bottom line: look for this meeting to come and go with little fanfare.
