WASHINGTON — The Federal Open Market Committee gaveled in Tuesday morning for a two-day meeting whose conclusion has been baked into Treasury futures since late September, prompting officials to clear their calendars and pretend to think.
The 25-basis-point cut, already reflected in the two-year, the dollar index, and an Etsy listing for a Jerome Powell prayer candle, will be formally announced Wednesday at 2 p.m. Eastern. The intervening 30 hours are reserved for staff presentations, a working lunch of room-temperature turkey wraps, and the ceremonial revision of dot plots.
“It’s important the Committee deliberate carefully and weigh incoming data,” said one senior Fed staffer, unwrapping a granola bar at a conference table where the decision had been sitting in a Google Doc since Friday. The doc’s edit history shows 14 changes, all to the word “appropriate.”
Markets remain unbothered. The CME FedWatch tool, which tracks rate-cut probabilities so traders don’t have to, showed a 96% chance of the cut as of Monday — a number that has not meaningfully moved since a mid-November Wall Street Journal piece widely interpreted as Nick Timiraos clearing his throat.
“We priced this in October 14th,” said Devra Kohl, a rates strategist at Beacon Macro who spent Tuesday morning trading a Bloomberg chat about whether the SEP would use the word ‘modestly’ or ‘moderately.’ “Anything Powell says tomorrow that isn’t ‘modestly’ is a 40-handle move in the long bond. Anything he says that IS ‘modestly’ is also a 40-handle move, just in the other direction. It’s a coin flip we already flipped.”
Inside the Eccles Building, the mood was described by one staffer as “calm, with light Sudoku.” A junior economist on the second floor was observed eating a Sweetgreen guacamole greens plate while paging through the Beige Book. The Beige Book, sources confirmed, is also already priced in.
President Trump, who has spent the past six weeks demanding a 100-basis-point cut on Truth Social and referring to the chair as “Too Late Jerome the Slow Walker,” reiterated his position Tuesday before pivoting to a post about a Caribbean cruise line he believes is being treated unfairly. Aides said the President will respond to whatever the Fed does by demanding it have done more of it, faster.
The Wednesday press conference is expected to last 47 minutes, of which 44 will be Powell saying “data-dependent” in slightly different orders. Reporters will ask whether the Committee sees a path to further cuts. Powell will say the Committee is monitoring developments. The S&P will close up 0.3%. The 10-year will close at exactly where it opened.
“This is the part of central banking they don’t put in the textbook,” Kohl said, watching her Bloomberg ticker do nothing. “Two days of meetings to ratify a Tuesday in October. The dot plot is performance art at this point. The performance is just that we’re still here.”