The labor market broadly can be categorized as 'low hire, low fire', says BofA's Mark Cabana

Federal Reserve Interest Rate Decision - The Federal Reserve is widely expected to cut interest rates by 25 basis points in the upcoming announcement [1][2] - Market participants are looking for guidance on future rate cuts, particularly for the December meeting, but expectations may be overly optimistic [2][18] Balance Sheet Management - The Fed has been reducing its balance sheet for nearly two and a half years, shrinking it by over $2 trillion [4][5] - There is a concern that if the Fed continues to shrink its balance sheet without adding liquidity, it could lead to a rapid increase in money market rates, forcing market participants to deleverage [5][7] Economic Indicators - Current economic indicators show a resilient consumer despite a slowdown in hiring, with wage growth rising [13][15] - Corporate profitability remains high, and equities are near all-time highs, yet there are mixed signals in the labor market [15][18] Labor Market Dynamics - The labor market is characterized as "low hire, low fire," indicating stability for those in valuable positions, while challenges exist for less specialized roles [17][18] - The Fed is likely to focus more on labor market conditions than inflation, despite inflation being above target [19][20] Market Reactions - The rates market may react to a Fed that is less dovish than currently priced, potentially leading to a rise in front-end rates after the decision [20] - This cautious approach from the Fed could create headwinds for equities and other risk assets [20]