MNI Fed Preview - Nov 2024: Cutting Through The Storms

MNI (NEW YORK) - EXECUTIVE SUMMARY: 

• The FOMC is on course to cut the Fed funds rate by 25bp on Nov 7, as it takes another step in paring back restraint.
• Stronger-than-expected activity and labor market data have removed a second consecutive 50bp cut from the conversation, but a soft if distorted October payrolls report cemented that November would see a cut and not a "skip".
• Given that Powell has previously endorsed the September Dot Plot as the best guide to policy, we would expect him to have to address whether it’s still current as of November 7. A hawkish reply would involve him setting up a “skip” in December, whereas a simple reiteration that the SEP still states the base case would be taken dovishly.
• We don’t expect any revelations in the Statement, where changes may be limited to the first paragraph’s description of current economic conditions.
• And whatever the result of the election two days prior, expect Powell to fend off questions over the implications of the election for monetary policy, and reiterate the importance of the Fed’s independence – though he may find it tricky to explain the causes and implications of a steepening yield curve since the September rate cut.

Note to readers: MNI’s separate preview of sell-side analyst summaries to follow on Monday, Nov 4