Summary:
The financial markets remained sideways despite hawkish comments from several Federal Reserve speakers on October 31, 2025. The Fed officials, including Logan, Hammack, Bostic, and Schmid, expressed concerns about inflation and emphasized maintaining restrictive monetary policies. While bond markets showed minimal reaction, the collective hawkish tone sets the stage for heightened data scrutiny ahead of the next Fed meeting and dot plot release.
What This Means for You:
- Prepare for Volatility: With the Fed leaning hawkish, expect market fluctuations as investors react to economic data.
- Monitor Interest Rates: Stay informed about rate decisions, as they could impact mortgages, loans, and investments.
- Focus on Inflation Indicators: Keep an eye on inflation reports, which will heavily influence Fed policy moving forward.
- Future Outlook: The next six weeks of data will be critical in shaping the Fed’s December decision; plan accordingly.
Original Post:
Sideways Overall Despite Hawkish Fed Speakers
Fri, Oct 31 2025, 3:53 PM
Although there was some mid-day volatility (early buying followed by slower selling back to roughly unchanged territory), that movement was more in line with month-end tradeflows than any interesting, specific motivations. Nonetheless, there were interesting, specific developments in the form of several comments from several Fed speakers. Rather than display a balanced mix of differing viewpoints, today’s crop of comments was distinctly hawkish across the board. Logan said she would have preferred to hold rates steady this week and can’t see a case for a December cut. Hammack said it’s not clear what the right answer is for rates, but that it’s important to stay restrictive. Bostic said he was glad Powell said a December cut is far from a foregone conclusion. And Schmid said he dissented in this week’s vote due to economic momentum and inflation concerns. While bonds didn’t react to this today, the lopsided hawkishness makes for an interesting 6 weeks of data-watching ahead of the next Fed meeting and dot plot.
09:44 AM
A hair weaker overnight, but gaining ground since the open. MBS up 5 ticks (.16) and 10yr down 1bp at 4.086
11:43 AM
MBS up 2 ticks (.06) on the day but down an eighth from the AM highs. 10yr now up 0.2bps at 4.097
12:29 PM
MBS down 6 ticks from highs (.19) and 1 tick on the day. 10yr up 0.4bps at 4.099
03:17 PM
MBS down 7 ticks (.22) from highs and 2 ticks (.06) on the day. 10yr unchanged at 4.094
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Extra Information:
Federal Reserve Meeting Calendar – Stay updated on upcoming Fed meetings and decisions. What Does Hawkish Mean? – Understand the implications of hawkish monetary policy.
People Also Ask About:
- What does hawkish Fed policy mean? It indicates a focus on raising interest rates to curb inflation.
- How do Fed comments affect the market? They can cause volatility as investors adjust expectations.
- What is the dot plot? It’s a chart showing individual Fed officials’ interest rate projections.
- Why did Schmid dissent? He cited concerns about economic momentum and inflation.
Expert Opinion:
The lopsided hawkishness among Fed speakers underscores a cautious approach to inflation, suggesting that rate cuts are unlikely in the near term. Investors should brace for continued market sensitivity to economic indicators in the lead-up to the December meeting.
Key Terms:
- Hawkish Federal Reserve Policy
- Interest Rate Projections
- Inflation Concerns
- Monetary Policy Impact
- Market Volatility Analysis
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