Event though we’re still digesting the beggining of the new monetary policy cycle, the market already has a view on the next meeting and is betting on it. As you can see in the chart below, the odds of another 50 bps rate cut on November 7th, just 2 days after Election Day, are close to 50%. And they have been increasing over the last few days. It would appear as if a case is building for the Fed to be behind the curve and in the process of catching up to avoid a recession. Officially, nothing has changed; the economy is strong and they will recalibrate meeting by meeting depending on the data. But under the surface, things seem to be moving faster, otherwise the aggressiveness of the Fed will make no sense. This week, several Fed members will give formal speeches, including Chairman Powell (Thursday). We should expect the same message he provided on Wednesday, but may use this opportunity to make verbal adjustments to the narrative.

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