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2025-10-29 16:32:47
[Fed October Policy Statement and Voting Proportions Preview] ⑴ Regarding the economic assessment, institutions expect the first sentence of the Federal Open Market Committee (FOMC) statement to be adjusted to acknowledge the rebound in economic activity. ⑵ The statement may state that "recent indicators suggest that economic activity has been expanding at a solid pace," and may add explanations regarding the impact of the government shutdown on the economic assessment due to a lack of data. ⑶ Regarding employment and inflation, analysts believe that given the lack of data due to the government shutdown, the Fed may maintain its existing assessment that employment growth is slowing and inflation remains high. ⑷ However, the weaker-than-expected September inflation data last Friday may prompt a slight adjustment in the inflation statement. ⑸ Regarding the balance sheet reduction plan, several institutional strategists expect the Fed to stop reducing its approximately $6.6 trillion balance sheet this month. ⑹ Regarding voting proportions, institutions expect a possible division within the policymaking body, with Governor Milan potentially advocating for a larger rate cut. ⑺ Some institutions predict a "three-way split" in the policy vote: one dissenter supports a larger rate cut, while some officials may prefer to keep rates unchanged. (8) Analysts point out that Milan is expected to advocate a more aggressive easing stance, which, if supported by other board members, will drive up stock and gold prices. (9) However, others are unlikely to follow his lead, and any dissent supporting maintaining the current interest rate would send a strong hawkish signal, although this risk is relatively low.
