FOMC minutes: "most participants" see another hike by year-end — lands after a strong 10y auction (5.300%, stop-through)
Posted: Wed Oct 07, 2026 6:10 pm
The September minutes are out (2pm ET), and they read hawkish, as expected. They come straight after the best 10-year auction in a while.
From the minutes (Sept 15–16 meeting, the 25bp hike to 3.75–4.00%):
- All participants backed the hike. "Many" framed a higher path as risk-management insurance against sticky inflation, and "a number" said they need it on their base case, not just as insurance.
- "Most participants" judged that another increase would likely be appropriate by year-end. They kept the usual "open mind, data-dependent" line.
- "Several" said the current rate is not restrictive or only mildly restrictive, and a couple raised their neutral-rate estimates.
- Inflation risks were seen as tilted to the upside. "Many" warned that the longer energy prices stay high, the bigger the risk of broader price pressure, and some flagged the AI buildout pushing demand ahead of supply.
- On the balance sheet, a few suggested strengthening the Fed's tools for Treasury-market dysfunction while keeping its footprint small. Worth noting with the 30y at 24-year highs.
The 10y auction at 1pm ET: $39B cleared at 5.300% vs ~5.317% when-issued (a 1.7bp stop-through), bid-to-cover 2.77 (six-auction average ~2.54), indirects ~80%, dealers left with only ~2.5%. So real money is willing to buy duration at these levels.
How I'd read it for the last two hours:
- Remember the minutes predate the soft September payrolls and the cooler PCE. Futures had already cut October hike odds to ~20%, so the market can treat this as old news, with December as the live meeting.
- The tug-of-war is a hawkish document against a strong auction. If 10s hold under ~5.30% after the headlines, the morning selling in small caps and rate-sensitive cyclicals could ease into the close. If yields push back toward 5.35%, the morning lows come back into play.
- Expect a whippy first 15–30 minutes after the release, then the real direction.
Source (public): [Federal Reserve: FOMC minutes, Sept 15–16, 2026](https://www.federalreserve.gov/monetary ... 260916.htm); auction results via Newsquawk / investingLive.
Did anyone trade the 2pm release, or do you wait for the first 15-minute candle to close? Do you think December is now a real hike risk, or will the softer data win?
From the minutes (Sept 15–16 meeting, the 25bp hike to 3.75–4.00%):
- All participants backed the hike. "Many" framed a higher path as risk-management insurance against sticky inflation, and "a number" said they need it on their base case, not just as insurance.
- "Most participants" judged that another increase would likely be appropriate by year-end. They kept the usual "open mind, data-dependent" line.
- "Several" said the current rate is not restrictive or only mildly restrictive, and a couple raised their neutral-rate estimates.
- Inflation risks were seen as tilted to the upside. "Many" warned that the longer energy prices stay high, the bigger the risk of broader price pressure, and some flagged the AI buildout pushing demand ahead of supply.
- On the balance sheet, a few suggested strengthening the Fed's tools for Treasury-market dysfunction while keeping its footprint small. Worth noting with the 30y at 24-year highs.
The 10y auction at 1pm ET: $39B cleared at 5.300% vs ~5.317% when-issued (a 1.7bp stop-through), bid-to-cover 2.77 (six-auction average ~2.54), indirects ~80%, dealers left with only ~2.5%. So real money is willing to buy duration at these levels.
How I'd read it for the last two hours:
- Remember the minutes predate the soft September payrolls and the cooler PCE. Futures had already cut October hike odds to ~20%, so the market can treat this as old news, with December as the live meeting.
- The tug-of-war is a hawkish document against a strong auction. If 10s hold under ~5.30% after the headlines, the morning selling in small caps and rate-sensitive cyclicals could ease into the close. If yields push back toward 5.35%, the morning lows come back into play.
- Expect a whippy first 15–30 minutes after the release, then the real direction.
Source (public): [Federal Reserve: FOMC minutes, Sept 15–16, 2026](https://www.federalreserve.gov/monetary ... 260916.htm); auction results via Newsquawk / investingLive.
Did anyone trade the 2pm release, or do you wait for the first 15-minute candle to close? Do you think December is now a real hike risk, or will the softer data win?