The Fed's "hawkish hold" under Chair Warsh is the dominant market story, with a December hike now widely priced in.
Published research this week broadly flags the 10-2 hold, with Governors Cook and Hammack dissenting in favor of a hike. The consensus across analyst notes puts December hike odds at roughly 81-87%. Warsh's tone was read as modestly dovish, with tighter financial conditions doing some of the Fed's work. A contrarian thread argues the Fed is already behind the curve.
Energy is the shared inflation driver researchers keep returning to. Disruption around the Strait of Hormuz and the Iran conflict have pushed Brent near $114-115, which several analyst notes link to firmer inflation and higher bond yields — and to a hawkish tilt at the Fed, BoC and ECB. The ECB held at 2.50%, but Lagarde signaled the direction of travel is clear.
On AI, Alphabet's negative free cash flow contrasted with Microsoft's strength. One camp of analysts sees hyperscaler funding as resilient; others warn of credit stress at smaller "neocloud" players as capex increasingly relies on external capital.
Watch: US midterms Nov 3, October payrolls, RBA and BoJ decisions, and the Dec 9 FOMC.