The Fed looks set to end its massive market intervention. Can it do that without spooking traders?

Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months. In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee decided to conclude the reduction of its aggregate securities holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Christopher J. Waller. Voting against this action were Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting, and Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting. FOMC STATEMENT COMPARE: pic.twitter.com/1xW7cnChGP *FED CUTS TARGET RANGE FOR BENCHMARK RATE BY 25 BPS, TO 3.75%-4% *FED SAYS IT WILL STOP SHRINKING BALANCE SHEET ON DEC. 1 *FED SAYS SCHMID DISSENTED IN FAVOR OF NO RATE CHANGE *FED SAYS MIRAN DISSENTED IN FAVOR OF HALF-POINT CUT

The easy part for the Federal Reserve on Wednesday will be announcing an interest rate cut when it wraps up its two-day policy meeting. The hard part will be taking care of other details that are presenting substantial challenges to policymaking these days. Markets are assigning a nearly 100% probability that the Federal Open Market Committee will approve a ...

The yield on the US 10-year Treasury is hovering around 4%, while the 2-year is sticking close to 3.5%. There's not much difference between the two, so the yield curve is pretty flat. The drop in the 10-year yield has been helped by a narrowing in the swap spread to the secured overnight financing rate (SOFR). It’s shrunk by more than 10 basis points, from ...