The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1422 ET - Treasury yields edge higher as the Fed holds rates unchanged, as expected. FOMC members Lisa Cook and Beth Hammack dissent to support a hike. The post-meeting statement says economic activity is expanding at a strong pace, adding that spending has been resilient, productivity is strong, capital investment is robust and job gains "have kept pace with the workforce," while inflation remains elevated. It states, however, that uncertainty remains elevated due, in part, to "geopolitical developments." The 10-year yield reaches an intraday high of 5.04% following the decision and ahead of Chairman Warsh's presser. The two-year is at 4.78%. (paulo.trevisani@wsj.com; @ptrevisani)
1419 ET - U.S. stocks are mostly higher, but the Nasdaq falls into negative territory following the Fed's decision to leave rates unchanged. FOMC says, "Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient." The statement says job gains have kept pace with the workforce, and the unemployment rate has changed little. There were dissents from Cook and Hammack, which BMO said recently could be a way to signal "hawkishness without forward guidance." The DJIA is up 0.2% and the S&P 500 gains 0.1% while the Nasdaq slips 0.2%. (patrick.sheridan@wsj.com)
1402 ET - The Federal Reserve's Lisa Cook joined with Beth Hammack in dissenting to the rate-setting committee's decision to hold rates steady. This is Cook's first such dissent as a Fed governor. It comes amid a White House probe into Cook's personal mortgage history, the latest move in the president's longstanding campaign to oust Cook from the central bank. Both Cook and Hammack said they preferred to raise the target range for the federal funds rate by a quarter point. (dean.seal@wsj.com)
1338 ET - Gold futures slip as oil prices rise on Middle East escalation concerns, with the market waiting on the Fed for guidance on interest rates. "While no rate hike is expected, investors are likely to focus on whether the tone turns more hawkish than markets anticipate and what that signals for further increases this year and in 2027," Critical Metals CEO Tony Sage says in a note. Any dovish signs in PCE inflation and GDP numbers later this week could support gold, "while firm data could lift the dollar and weigh on the metal," he says. Front-month gold settles down 0.6% in New York at $4,036.00 a troy ounce. Silver falls 1.5% to $53.457 a troy ounce, its lowest close since Nov. 26, 2025. (anthony.harrup@wsj.com)
1322 ET - Long-term bitcoin holders own about 4 million bitcoin that were bought between $85,000 and $118,000 apiece, according to analysts from Glassnode. That means they are generally underwater at the current price level, which is hovering about $80,000, the analysts say. More than half of all of long-term holders' coins were bought above that critical level, they say. If the price recovers toward $85,000, many of those long-term holders may sell to get their money back, the analysts say. ETF demand has faded, though each new dip now realizes smaller losses, they say. (dean.seal@wsj.com)
1206 ET - RSM Canada economist Tu Nguyen reckons the Bank of Canada's first interest rate increase in more than three years won't be its last. The economist expects the next move as early as December, and more following in 2027. "The tone in the bank's announcement is decidedly hawkish and the message is clear: this is the first hike in a hiking cycle." Nguyen says high oil prices and therefore higher inflation are persistent and no longer transitory. (robb.stewart@wsj.com; @RobbMStewart)
1200 ET - While the Fed committee is expected to hold rates steady, they could surprise the market with an unexpected move, according to a note from Stifel Economics. "Some may read a surprise adjustment as a push to establish or cement the Fed's independence both from political and market pressures," they write. However, with investors firmly convinced the Fed is on hold until December, a decision to move sooner rather than later may signal a higher level of concern regarding inflation, boosting both expectations for inflation as well as the longer-run pathway of policy, they say. (jessica.coacci@wsj.com)
1159 ET - The Bank of Canada stepped off the sidelines with a quarter percentage point rate increase but its guidance is less committal on the path forward, TD Securities says. It now looks for the central bank to raise again in December, taking the policy rate to an end-of-cycle 2.75%. TD notes the Bank of Canada saying it will proceed gradually. (robb.stewart@wsj.com; @RobbMStewart)
1143 ET - The U.K. Debt Management Office announced reduced size of long-dated gilts sales in the fiscal year 2026-27, causing their prices to rise and yields to fall. Planned sales of long-dated conventional gilts fall to 15.5 billion pounds in 2026-27, from 22.4 billion pounds announced in April. Planned sales of long conventional gilts through syndication are down by 2.5 billion pounds to 12.5 billion pounds, the DMO says. U.K. 30-year gilt yields fall to a 5-week low of 5.691% following the gilt remit publication, and last trade at 5.709%, LSEG data show. (miriam.mukuru@wsj.com)
1141 ET - The U.K. budget provided reassurance to investors as the gilt market remains calm following the earlier announcements by Treasury Chief John Healey, says James Sproule, U.K. chief economist at Handelsbanken, in a note. Healey maintained investor confidence by announcing a wide range of small fiscal measures and reiterating the government's commitment to fiscal rules, he says. Ten-year gilt yields fall 1.2 basis points to last trade at 5.329%, Tradeweb data show. (miriam.mukuru@wsj.com)
1131 ET - There is likely more tightening to come from the Bank of Canada but the pace of further interest rate increases is extremely uncertain and will be driven by incoming data, Bank of Montreal's Benjamin Reitzes argues. Anticipated weakness in fourth-quarter GDP and trade uncertainty give policymakers reason to be cautious, the macro strategist says. If the economy shows better momentum then that is likely to trigger the next move, he says. (robb.stewart@wsj.com; @RobbMStewart)
1128 ET - Treasury Chief John Healey has bought himself time rather than resolving the U.K.'s fiscal problems, Sanjay Raja at Deutsche Bank says in a note. Although markets reacted positively to the budget, borrowing is expected to remain higher than previously forecast, while much of the promised fiscal tightening is backloaded, raising questions about whether it will be delivered, he says. The tax burden is still on course to reach a postwar high, despite limited new tax increases, and further spending pressures are looming including defense and social care, Raja says. "Put simply, there will be a near GBP25-40 billion fiscal hole to fill in the new year... the U.K. is walking an increasingly fine fiscal line, with the harder choices still to come," he says.
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