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Steady course maintained; no serious shift likely before March.

Pantheon Macro writes….”The statement differs from September’s only in that it says that the rate of growth
of business fixed investment “has moderated from its rapid pace earlier in the year”; the previous statement said it had “grown strongly”. This downgrade reflects the softness of Q3 capex in the GDP accounts, which showed business fixed investment rose at a mere 0.8% annualized rate, slowing sharply from the 8.7% Q2 jump. We think this is noise rather than signal, and we also think the Q2 number likely will be revised up. Strong earnings growth, still-low rates, and the need to rebuild and renew the capital stock should keep capex rising at a decent clip. We’re slightly surprised the Fed didn’t mention the drop in stocks, though the rally over the past week means that the net impact on financial conditions since the market’s peak is very small. Assuming that remains the case, a rate hike next month is a done deal,but what we really want to see is how the Fed’s thinking evolves over the first few months of next year if the labor market continues to tighten and wage growth picks up, as we expect”.

as zerohesge concludes “Reading between the lines it is difficult to explain the oddly hawkish response in the market, which has seen the BBDXY spike to 1205 while 10Y yields are just shy of session highs, if perhaps to note that Scotia may be closest: the Fed is telegraphing more hiking in the face of growing opposition from Trump”

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