FOMC Minutes Preview – 10.08.2025
At 19:00 UK (14:00 ET) today, the Federal Reserve releases the minutes from its September 16 – 17 meeting, the one that delivered the first 25 bp cut of 2025, taking the target range to 4.00% – 4.25% and featuring Stephen Miran’s dissent in favor of a 50 bp move.
With a U.S. government shutdown stalling key data (payrolls, CPI) and forcing traders to lean on private proxies, these minutes carry extra weight for gauging the October 28 – 29 and December 9 – 10 meetings.
We expect the market to comb the text for the breadth of support for further easing, the Fed’s risk-management framing, and any clues on the QT end-game.
We’re scanning for four things tonight: how widespread support was for further easing (and how close some came to a larger cut), the risk-management lens balancing sticky inflation against a softening labor market amid data gaps, the QT end-game, i.e., where “ample” reserves sit and how/when runoff winds down, and whether the SEP/dots still anchor a gradual, cuts-but-careful path.
FOMC Minutes – What We Expect
1) How broad was support for easing?
The statement acknowledged a rise in downside risks to employment; the minutes should show whether many participants were already leaning toward a faster pace of cuts, and how close some were to Miran’s -50 bp dissent.
2) The framework: “risk management.”
Look for language balancing above-target inflation against labor-market slack and data uncertainty during the shutdown, i.e., an easing bias with optionality.
3) QT end-game and reserves.
Since April, the Fed has been in “slow QT” mode (Treasury cap $5B; MBS cap $35B, with MBS principal over the cap reinvested into Treasuries). The minutes may discuss where “ample” reserves sit and how/when QT ultimately winds down.
4) The dots and macro narrative.
September’s SEP medians imply a gradual easing path (end-2025 funds rate median 3.6%; unemployment 4.5%; core PCE ~3.1%), consistent with a “cuts-but-careful” stance.
The Macro Tape Heading In
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Inflation: August PCE rose 0.3% m/m; core PCE 0.2% m/m (2.7% y/y headline, 2.9% y/y core). CPI for August printed 2.9% y/y (core 3.1%).
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Activity & labor proxies: ISM Services slipped to 50.0 in September (breakeven), while ISM Manufacturing was 49.1, softening momentum and a cooler labor tone.
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Rates & USD: UST 2Y 3.57% (Oct 7) and 10Y ~4.13–4.18% heading into today; DXY 98.9 in European trade. YCharts+2FRED+2
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Commodities: Gold broke above $4,000 for the first time; oil is steady-firm (Brent $66, WTI $62) after OPEC+ signaled a restrained output path.
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Data blackout: The shutdown has delayed official September payrolls and other releases, elevating the signaling power of today’s minutes.
Market Set-Up & Pricing
Futures are heavily skewed toward another 25 bp cut on Oct 29 and strong odds of one more in December, squarely aligned with September’s dots. This makes the language—not the destination—the key volatility driver. Investing.com+1
Scenario Map: How Different Minutes Landings Could Hit Assets
1) Dovish-leaning minutes
Text tells: “Several/many” favored quicker easing; staff outlook tilts softer; explicit comfort with two more cuts this year.
Rates: Front-end rally; 2Y -8–15 bp, curve bull-steepens 5s/30s.
FX: Broad USD softer; USDJPY ↓ (highest beta to 2Y), EURUSD/GBPUSD ↑, USDCHF ↓.
Commodities: Gold extends above $4k; oil benefits modestly via softer USD.
Equities: Duration/growth lead; cyclicals mixed if growth concerns are emphasized.
Tape tells to watch: 2Y through 3.50% and DXY slipping below 98.5 for confirmation.
2) Balanced minutes
Text tells: Gradualism, data-dependence, little appetite for -50 bp; QT discussion technical.
Rates/FX: Small knee-jerk fades; USD and yields range-bound.
Risk assets: Neutral to mildly supportive.
3) Hawkish-tilt pushback
Text tells: Inflation concerns foregrounded; little labor-slack emphasis; “not preset on Oct/Dec.”
Rates: Bear-flatten; 2Y +5–10 bp.
FX: USD bid (USDJPY ↑; EURUSD/GBPUSD ↓; USDCHF ↑).
Commodities: Gold pullback toward breakout retest; oil softer on firmer USD.
Tape tells to watch: 2Y back above ~3.65%, DXY > ~99.2. YCharts+1
Asset Notes & Levels That Matter
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USDJPY: Most sensitive to U.S. 2Y moves; dovish minutes + lower 2Y = JPY outperformance. Keep an eye on Japan headlines, but the front-end is your clearest driver today. YCharts
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EURUSD / GBPUSD: A dovish skew should relieve dollar pressure; European growth wobble (Germany’s August -4.3% industrial output) limits upside asymmetrically. Reuters
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USDCHF: Classic policy-surprise hedge (lower on dovish; higher on hawkish/risk-off).
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Gold (XAU): Breakout regime > $4,000 adds momentum tailwind on any softening of policy language. Barron’s
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Oil: OPEC+ restraint & USD path dominates intraday; Brent holding mid-$60s.
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USTs: QT already slowed (Treasury cap $5B, MBS $35B with over-cap reinvested into Treasuries); any “end-game” hints could nudge repo/reserve-comfort narratives more than outright yields.
What to Read For at 19:00
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Breadth of easing support: “several/many participants” preferring a faster pace or larger size.
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Risk-management lens: how the Committee weighed labor slack vs. sticky services inflation, especially with the shutdown muddying data visibility.
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QT end-game: signals on reserves, ON RRP usage, and the mechanics/timing of a landing zone.
Conclusion
With the policy rate already trimmed to 4.00% – 4.25% and the dot plot pointing to measured additional easing, the minutes will likely validate an easing bias while preserving optionality amid data gaps and lingering inflation. In markets primed for another 25 bp in October, the tone, not the destination, should steer price action: front-end yields and DXY remain your cleanest tells, and gold’s historic breakout adds a powerful cross-check of risk sentiment.
If the text leans dovish without flashing recession, expect duration / growth to lead and USD softness to extend; a hawkish tilt would quickly flip the script into bear-flattening and a firmer dollar.
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