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Treasury yields rose after what was perceived to be a hawkish stance on additional key interest rate cuts, but I expect market rates to resume declining and force the Fed to cut again at its December . The Fed announced on Wednesday that it is winding down their three- and half-year campaign to shrink its $6.6 trillion balance sheet on December 1st. A minority of FOMC officials want the Fed to cut key at its December FOMC meeting, while a majority did not think another cut is necessary. New FOMC member Stephen Miran voted to ease by 0.5%, while FOMC member Jeffrey Schmid voted for no key interest rate cut. Fed Chairman Jerome Powell said that there were “strongly differing views” on what to do at the next FOMC meeting. Specifically, Powell said, “In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December,” and added, “A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.” Since the Fed is “flying blind” with a lack of pertinent economic data, the FOMC is just being cautious. The dialogue between China and the U.S. has apparently improved after not meeting with President Xi for six years. President Trump said that he has an “amazing meeting” with President Xi on Thursday. China’s rare earth export restrictions were lifted for one year in exchange for the Trump Administration not imposing additional tariffs. China and the U.S. also agreed to meet every year to discuss trade and tariffs. On Truth Social, President Trump said that President Xi had authorized purchases of “massive amounts” of soybeans and other American agricultural products and then added that “Our Farmers will be very happy!” President Trump also agreed to visit President Xi in China next year. Meanwhile, The New York Times reported that is laying off 1,750 workers indefinitely and 1,670 workers temporarily at its EV manufacturing plants due to the expiration of the $7,500 federal tax credit. In a statement, GM said, “In response to slower near-term EV adoption and an evolving regulatory environment, General Motors is realigning EV capacity” and added that “Despite these changes, GM remains committed to our U.S. manufacturing footprint.”
