Good morning contrarians! Futures are quiet as we await the Fed interest rate decision this afternoon.

The Fed is widely expected to leave its key policy rate unchanged. That means the focus will turn to what is expressed about future interest rate policy.

The policy statement, dot-plots, and Powell’s presser will all be carefully (over)scrutinized. There will be much hunting for clues and probably a lot of over-reacting. You can watch the bond market and of course Fed Fund Futures. Right now these are pricing in less of a chance of a rate hike at the next meeting in November, with the odds of a hike at just 27% — down from 42% a week ago.

The bottom line? Inflation is still too high. You either need more rate hikes, quantitative tightening, or an economic slowdown to bring it down.

More in today’s briefing and podcast here: