Core PCE cooled to 3.0% year over year on Wednesday, but October rate-hike odds barely moved until New York Fed's John Williams urged patience. Fed Governor Michael Barr says the data still call for more hikes.
New York Fed President John Williams told a Buffalo audience there is “no need for urgency” after September’s hike, pushing markets to fade October odds. Source
Futures markets spent much of the week pricing an October rate hike as near-certain, with odds tracked by the CME Group's FedWatch tool climbing toward 70%. Then Wednesday's inflation data came in soft across every measure that matters, and the odds barely moved. They collapsed only after New York Fed President John Williams took the podium in Buffalo on Tuesday and said the Federal Open Market Committee (FOMC) has "no need for urgency." By Thursday, October odds had fallen to the mid-30s to low-40s percent range.
