The Trading Coach Podcast 1235 - The Fed’s Big Move: Rate Cuts, Quantitative Tightening, and Market Reaction
Nov 2, 2025
The Fed's recent decisions are shaking up markets as traders focus on more than just rate cuts. Key insights reveal internal tensions within the FOMC and the implications of ending quantitative tightening. Powell's cautious tone adds uncertainty to upcoming cuts, while the government shutdown complicates policymaking. The conversation also dives into labor market trends, potential AI hiring risks, and what the Fed's balance sheet history means for investors. Overall, it's all about understanding market reactions beyond the headline rates.
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Fed Cuts But December Is Uncertain
- The Fed cut rates again but internal disagreement makes future cuts uncertain.
- Powell's caution dropped December cut odds from ~90% to ~67%, showing split views matter.
Shutdown Limits Fed's Data Visibility
- The government shutdown hampered the Fed's data flow and leaves it 'flying blind.'
- Limited data means policymakers rely on few indicators like CPI to judge labor and inflation trends.
Labor Data Shows Weak Hiring
- Recent indicators show weak hiring and slightly higher unemployment, not a strong economy.
- Powell said those indicators are consistent with earlier data, reducing confidence to ease quickly.