Booth: Fed's Unsurprising Cut, Surprising Commentary from Jerome Powell

Core Viewpoint - The Federal Reserve's recent decision to cut interest rates by 25 basis points was anticipated, but the strong indication that December's meeting may not result in further cuts surprised market participants [2][3]. Group 1: Federal Reserve's Decision and Market Reaction - The Fed's decision to cut rates was expected, but the emphasis on not considering a December meeting for further cuts caught the market off guard [2][3]. - There was dissent among policymakers, with some advocating for a larger cut while others preferred no changes at all, indicating a divided stance within the Fed [4][5]. - The current environment suggests that more dissenting opinions may emerge in the upcoming months as the Fed navigates its policy decisions [5]. Group 2: Economic Indicators and Labor Market - The job market is showing signs of weakness, and the Fed is operating with limited data, lacking the monthly payrolls report, which complicates their decision-making [7]. - Recent CPI data indicated a cooler inflation rate, primarily due to falling shelter prices, but the Fed's control over inflation is limited, particularly regarding food and electricity prices [11]. Group 3: Leadership and Future Implications - Discussions are ongoing regarding the next Fed chair, with five potential candidates differing significantly in their monetary policy views, which could lead to market volatility as a decision approaches [12][13]. - The Treasury Secretary has indicated a desire to make a decision by Thanksgiving, but the Senate's deliberation time is limited, potentially extending into the new year [12].