Fed dissenters & December doubts: Here's what to know

Core Viewpoint - The Federal Reserve's communication is increasingly chaotic, with mixed signals from various members regarding interest rate cuts, particularly for December [1][2][3]. Group 1: Fed Members' Opinions - Three Fed members opposed an October rate cut and expressed skepticism about a December reduction, citing strong economic momentum and inflation above target [2]. - Fed Governor Waller and Governor Myron advocate for further cuts, with Waller emphasizing the need for action despite uncertainty in the economic outlook [3][6]. - A significant number of Fed members are scheduled to speak this week, indicating ongoing discussions about monetary policy [4]. Group 2: Economic Indicators - The upcoming ADP jobs data is anticipated to be crucial for determining the Fed's direction on rate cuts, with many observers believing definitive job data is needed to unify the committee [5][9]. - Current jobless claims are low, suggesting a potential turnaround in the job market, which could influence the Fed's decision-making [9]. Group 3: Market Dynamics - The Fed is reassessing the appropriate level of reserves and plans to halt quantitative tightening, potentially increasing liquidity in the markets [6][7]. - There is a focus on the repo market and its implications for overall market tightness, although the Fed has downplayed its significance [5][7].