Reminder: The Fed blackout interval begins this Saturday however a charge minimize is now extra probably

The Fed blackout period starts the second Saturday preceding an FOMC meeting and ends the Thursday following the meeting. Federal Reserve policy limits the extent to which FOMC participants and staff can speak publicly or grant interviews during Federal Reserve blackout periods.

This means that the Fed members will still have time until Saturday to sway the market pricing into either side. Right now, the market is pricing a 60% chance of a rate cut following the dovish Fed’s Williams comments on Friday.

Below we can see the 12 voters and their inclination based on the recent speeches and comments:

• Powell (no comments)
• Cook (no comments)
• Jefferson (non committal)
• Barr (non committal)
• Williams (cut)
• Waller (cut)
• Bowman (cut)
• Miran (cut)
• Collins (hold)
• Goolsbee (hold)
• Musalem (hold)
• Schmid (hold)

We have 4 voting for hold and 4 voting for cut. 2 without comments and 2 without commitment.

Fed’s Williams comments on Friday were so important for the market pricing because he’s part of the so-called “troika”, which includes the Fed Chair (Powell), the Vice Chair (Jefferson) and the NY Fed President (Williams). In financial markets, these three are considered the most important members and their policy signals have more weight.

For example, if markets misunderstand or misinterpret Fed’s communication, one of those three is generally sent out to correct the misunderstanding with scheduled or unscheduled speeches. Therefore, given Fed’s Williams support for a rate cut, we can speculate that Powell and Jefferson will also vote for a cut.

This brings us to 6 voting for cut and 4 voting for hold.

Fed’s Cook has been leaning on the dovish side for a long time, so we can expect her to vote for a cut too. Fed’s Barr, on the other hand, has been kind of neutral, so it’s hard to put him in either camp.

To sum up, the probabilities for a December cut looks correct at 60% given the above mentioned reasons. What comes next will depend on the forward guidance, the dot plot and the NFP and CPI reports being released after the FOMC decision.