Fed and ECB Meeting Minutes Due for Release as Rate Hike Expectations Cool on Both Sides
nashnova research
The Fed and ECB will release their September meeting minutes this week, but soft U.S. jobs data and spreading French bond-market stress have sharply reduced the urgency for either central bank to hike again — market pricing for an October move has dropped to near zero.
The Fed wanted to hike in September — why the sudden patience?
At the September meeting, several policymakers flagged deep concern over inflation and signaled at least one more hike before year-end.
But the September jobs report undercut that case: payrolls missed expectations and wage growth came in soft — weakening the argument that the labor market is stoking prices.
This means → the hawkish language in the minutes reflects a past judgment, not a current action signal — newer data has already overwritten it.
What did the two key officials say?
Fed Vice Chair Philip Jefferson and New York Fed President John Williams spoke within two days of each other, both signaling no urgency to hike again.
Markets immediately slashed October hike odds. This means → the "no rush" signal from two core officials carries more weight for near-term pricing than the minutes themselves.
The next Fed meeting falls on October 27–28 — just days before the midterm elections — adding a political constraint on the window to act.
Is another hike this year still on the table?
Bloomberg Economics analysts Anna Wong, Andrew Sacher, and Eliza Winger wrote: "The bar for an October hike is now very high."
In plain terms = October is virtually off the table; December remains a live option, but only if services inflation shows a clear, sustained rebound.
Government revisions to the Fed's preferred inflation gauge also show that inflation this year has been slightly lower than previously estimated — further eroding the case for urgency.
What is different on the ECB side?
Eurozone September inflation came in above expectations, driven mainly by war-related energy costs — on the surface, a case for hiking.
But French bond-market stress created a counterforce: a parliamentary deadlock raised fiscal-deficit fears, the France-Germany spread widened sharply, and financial conditions tightened passively.
This means → the market has done some of the ECB's tightening work for it. Put simply = the bond market took over part of the central bank's job.
Why does the ECB leadership contest matter here?
Chief Economist Philip Lane, Austrian central bank governor Martin Kocher, and Belgian central bank governor Pierre Wunsch all have public appearances this week — their remarks will shape expectations alongside the minutes.
BIS General Manager Pablo Hernandez de Cos and former Dutch central bank president Klaas Knot — both seen as potential successors to President Christine Lagarde — will appear on the same stage.
This reflects a deeper dynamic: the ECB's policy signal is not just in the minutes text — the jockeying over top leadership is simultaneously shaping how markets read the policy path.
After both sets of minutes drop, what should markets watch?
There is really only one variable that matters: whether services inflation stages a sustained rebound — that is the last trigger for either central bank to hike again this year.
The hawkishness of the minutes text itself is now secondary — subsequent data and official remarks have already moved market expectations significantly.
In plain terms = the minutes are an "old photograph." What actually decides the next move is the inflation data still to come.
市场有风险，内容仅供研究参考，不构成投资建议。