Stock Market Update

[BRIEFING.COM] The FOMC voted to leave the target range for the fed funds rate unchanged at 3.50-3.75%, as expected. The vote was not unanimous. That wasn't a surprise either, as the market anticipated Fed Governor Miran would be on record as preferring a 25 basis points cut in the target range. The surprise with this directive is that it featured three Fed presidents - Hammack (Cleveland), Kashkari (Minneapolis), and Logan (Dallas) - dissenting over the language of the directive.

Specifically, the three presidents, who supported maintaining the target range at 3.50-3.75%, did not support an inclusion of an easing bias in the statement at this time.

The official vote, then, will be logged as 8-to-4, with CNBC reporting that is the most dissent at an FOMC meeting since 1992.

The directive itself hit many of the same notes. There was an acknowledgment that the economy has been expanding at a solid pace, that job gains have remained low, on average, that the unemployment rate has been little changed, and that inflation is elevated, in part due to the recent increase in global energy prices.

Developments in the Middle East, it said, "are contributing to a high level of uncertainty about the economic outlook." That is Fedspeak for 'you can expect us to remain on hold for a while.'

The market, though, has seemingly made its peace with that approach. To wit, there was a time when two rate cuts before the end of this year were expected; now, the next rate cut isn't expected until the October 2027 FOMC meeting, according to the CME FedWatch Tool, yet the S&P 500 and Nasdaq Composite both hit record highs earlier this week.

Attention will now be fixed on Fed Chair Powell, who will be conducting his last press conference as Fed chair. He reserves the right, however, to be at the next FOMC meeting as a Fed governor. Whether he decides to maintain that governor role when his time as Fed chair ends next month remains to be seen, but he might just have something market-moving to say about that today.