MBS Day Ahead: What is The Fed Even Thinking?

Posted To: MBS Commentary

Today's 'Day Ahead' title is both a rhetorical and literal question. On a literal level, we'll know soon enough, as 2pm brings the latest official policy statement in which the Fed may or may not offer some sort of clue about how a potential December rate hike is shaping up. On a more incredulous, rhetorical level, what in the world is the Fed thinking? Why would any Fed speaker in their right mind even be talking about a rate hike being a remotely appropriate thing in a world where inflation continues to drop and where domestic economic data has obviously begun the 'battleship-in-a-river' turn from the post-crisis expansion. Don't even get me started on the Fed's newfound consideration of global growth as a domestic inflation risk. Obviously if China is engaging...(read more)

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