Nov FOMC Minutes Preview: Some Hawkish Pushback Expected (1/2)

The minutes of the Nov 1-2 FOMC meeting are scheduled for release at 1400ET this Wednesday. As a reminder of that meeting, the Fed hiked 75bp - and opened the door to slowing the pace of hikes while indicating it will raise them more than previously anticipated and perhaps keep them there longer. (see MNI's meeting review for full details).

• As usual, the minutes could prove somewhat stale in some areas. Several FOMC officials have spoken since the meeting, much of it coming since the softer-than-expected October CPI print, which has mostly cemented pricing for a 50bp hike at the next meeting as opposed to 75bp.
• Barring a surprise in communications on that front (perhaps even merely reiterating what Powell said, that a stepdown could take place at one of the next two meetings, rather than specifically December), the discussion in the minutes over the terminal rate expectation and how long rates will be held there will be closely focused upon.
• The general expectation is that the FOMC will eye a terminal rate of at least 4.75-5.00% in the next Dot Plot (vs 4.50-4.75% last time); the risks are to a >5% rate to be signalled. Though how explicit that is made in the minutes is doubtful.
• In line with recent FOMC speaker communications, expect some pushback against the notion that a step-down to 50bp is a prelude to a pause, let alone a full-blown pivot.
• Likewise there is likely some pushback on market pricing for cuts next year - with this debate potentially characterized by the number of participants who saw the risks of over- vs under-tightening turning increasingly "two-sided" (this was "several" in the Sept minutes), how the lagged impact of tightening is characterized, and what constitutes "sufficiently restrictive" rates.