Fed rate cut path divergence ahead of October minutes
Divergence among Federal Reserve officials over the Fed rate cut path has increased market uncertainty. Persistent inflation concerns lead many policymakers to adopt a cautious stance on further rate cuts. Michael Lorizio of Manulife Investment Management notes that the lack of high-quality economic data makes it difficult for traders to form a confident outlook on the US economy. Consequently, US Treasury yields have traded in a narrow range as market participants await fresh catalysts. The release of the Fed’s October meeting minutes is expected to reveal how many officials may oppose a December rate cut and help markets refine expectations. Traders will monitor clues on the Fed rate cut path closely to adjust their positions accordingly.
Neutral
The divergence in views on the Fed rate cut path introduces uncertainty rather than a clear signal. While upcoming October meeting minutes may clarify the split between hawks and doves, there is no immediate catalyst for aggressive market moves. In past episodes—such as mixed Fed communications in mid-2023—similar uncertainty led to sideways trading in both bond and crypto markets. Short‐term traders are likely to stay cautious until the minutes provide clearer guidance, while long‐term investors may await confirmed rate-cut timelines before adjusting major positions. Overall, the effect on crypto is expected to be neutral as markets seek concrete policy direction.