Fed Holds as Inflation Persists, Curve Steepens

RoboMacro ResearchAlso todaySee the Equities Daily

Fed Holds as Inflation Persists, Curve Steepens

91.70 Cb Consumer Confidence676,000 New Home Sales-0.60 New Home Sales3.40 Atlanta Fed GDPNow-2.0m API Weekly Crude Oil

S&P 5007,743.98+0.28%

US 10Y Treasury5.05%+6 bp

WTI Crude101.45-1.29%

Gold4,044.50-0.18%

Market Snapshot

Asset	Level	Change
S&P 500	7,743.98	+0.28%
Nasdaq 100	29,813.16	+0.55%
Dow Jones	52,475.10	+0.19%
Russell 2000	2,830.51	+0.41%
USD/JPY	157.98	-0.01%
EUR/USD	1.11	+0.13%
GBP/USD	1.33	+0.11%
Gold	4,044.50	-0.18%
WTI Crude	101.45	-1.29%
Bitcoin	80,051.60	-1.50%
US 2Y Treasury	4.67%	-3 bp
US 10Y Treasury	5.05%	+6 bp

Prior Economic Events

Data	Prior	Cons	Actual
Cb Consumer Confidence	84.20	-	91.70
New Home Sales	680,000	650,000	676,000
New Home Sales Month-over-Month	5.10	-	-0.60
Atlanta Fed GDPNow	3.50	3.50	3.40
API Weekly Crude Oil Stocks	-4.9m	800,000	-2.0m
MBA 30-Year Mortgage Rate	7.41	-	7.37
Goods Trade Balance Adv	-132,070m	-130,000m	-134,900m
Retail Inventories Ex Autos Month-over-Month Adv	0.10	-	0.40
Wholesale Inventories Month-over-Month Adv	0.50	0.50	0.60
EIA Weekly Crude Oil Inventory	-3.1m	0	-1.9m

Today's Economic Events

Data	Prior	Cons	Time
Core PCE Price Index Month-over-Month	0.20	0.30	08:30
GDP Growth Quarter-over-Quarter Advance Estimate	2.20	3.20	08:30
Personal Income Month-over-Month	0.20	0.30	08:30
Personal Spending Month-over-Month	0.90	0.60	08:30
GDP Price Index Quarter-over-Quarter Adv	6.10	-	08:30
PCE Price Index Month-over-Month	0.30	0.50	08:30
PCE Price Index Year-over-Year	3.40	3.60	08:30
Weekly Jobless Claims	194,000	199,000	08:30

FOMC held the benchmark rate at 4.00% on Wednesday despite elevated inflation, with markets now focused on earnings and forward guidance
Treasury curve bear-steepened sharply: 10Y yield rose 6 bp to 5.05% while 2Y fell 3 bp to 4.67%, signaling growth and term-premium concerns
Consumer confidence jumped to 91.7 and GDPNow ticked down to 3.3%, painting a mixed picture of resilient demand against slowing momentum

Yesterday's Recap

The FOMC concluded its October meeting with a decision to hold the benchmark rate at 4.00%, in line with consensus, as policymakers balanced persistent inflation against softening activity signals. Earlier in the day, the Conference Board's consumer confidence measure jumped to 91.7 from 84.2, a notable upside surprise suggesting households remain resilient despite elevated borrowing costs. New home sales printed at 676,000, down 0.6% month-over-month and below the 650,000 consensus, reflecting the drag from a 7.37% MBA 30-year mortgage rate.

The advance goods trade balance widened to a $134.9 billion deficit, worse than the $130 billion consensus, while wholesale inventories rose 0.6% and retail inventories ex-autos climbed 0.4%. The Atlanta Fed GDPNow estimate slipped to 3.3% from 3.4%, still indicating solid above-trend growth. EIA crude inventories fell 1.892 million barrels while gasoline stocks built 3.87 million barrels, a bearish product signal that pressured WTI 1.29% lower to $101.45.

Equities closed modestly higher, with the Nasdaq 100 up 0.55% and the S&P 500 adding 0.28%, while the 10-year yield climbed 6 bp to 5.05% and the 2-year eased 3 bp to 4.67%.

The Day Ahead

Thursday's calendar is light on tier-one US data, with attention shifting to corporate earnings from major technology names and any follow-through from the FOMC decision. Markets will parse the Fed's statement language and press conference tone for signals on the path toward any future adjustment, particularly given the divergence between still-firm inflation at 3.70% year-over-year and the committee's decision to stand pat. Weekly labor market indicators and any Fed speaker appearances will be monitored for clues on whether the hold represents a pause or a peak.

With the 10-year at 5.05% and the curve steepening, duration-sensitive sectors and mortgage-linked housing activity remain key watch items. Traders will also assess whether the prior session's risk-on equity tone persists into month-end positioning.

Page 1

Other Economic Notes

The widening goods trade deficit to $134.9 billion underscores persistent import strength against a backdrop of solid consumer demand, though it poses a modest drag on net exports in GDP calculations. Inventory builds in both wholesale and retail channels suggest businesses are restocking ahead of anticipated demand, a signal that could support Q4 production but also risks overhang if consumption cools. The jump in consumer confidence to 91.7 contrasts with the housing sector's struggles, where new home sales fell 0.6% and mortgage rates near 7.37% continue to constrain affordability.

GDPNow at 3.3% remains well above the 2.20% QoQ SAAR recorded in Q2, implying a reacceleration that complicates the disinflation narrative. Unemployment at 4.20% remains historically low, keeping wage pressures in focus for the inflation outlook.

Global Macro News

The Fed's decision to hold rates steady despite surging inflation has drawn international attention, with global media framing the move as a pause ahead of crucial data. Asian chipmakers delivered strong third-quarter results, with SK Hynix noting supply constraints expected to persist through 2030, supporting the AI-driven demand narrative that has buoyed US technology equities. European markets showed caution ahead of the Fed decision and major US earnings, with chip stocks benefiting from positive sector news.

The dollar held steady against the yen at 157.98 and eased slightly versus the euro at 1.11, reflecting balanced cross-border flows. ↓ p.3

Continuation

Global Macro News (continued)

Arab states face pressure to diversify from rentier economies after the Iran war exposed structural weaknesses, a theme with implications for oil demand and global capital flows. Treasury sanctions on North Korean and Russian entities over alleged IT fraud added a geopolitical layer to market sentiment.

Fed Watch

The FOMC voted to hold the benchmark rate at 4.00% on Wednesday, a decision widely anticipated by markets given the tension between elevated inflation at 3.70% and signs of slowing momentum in housing and trade data. The statement and subsequent press conference emphasized data dependence, with policymakers signaling no rush to adjust policy while inflation remains above target. The hold comes despite surging inflation headlines, suggesting the committee views the current stance as appropriately restrictive and is willing to tolerate patience rather than risk premature easing.

Markets interpreted the decision as a pause rather than a pivot, with the 2-year yield easing 3 bp to 4.67% while the 10-year rose 6 bp to 5.05%, steepening the curve and reflecting concerns about fiscal and term-premium dynamics. The committee did not provide a definitive signal on the timing of any future move, leaving the door open for either direction depending on incoming data. With GDPNow at 3.3% and unemployment at 4.20%, the Fed faces a backdrop of resilient growth that argues against near-term cuts, while the housing sector's weakness at 7.37% mortgage rates highlights the transmission of restrictive policy.

Forward guidance remains cautious, with officials likely to watch inflation prints and labor market tightness before committing to any path.

US Macro Daily(Beta Mode)