Analyst: The dovish tilt of the October FOMC is clearly visible; the probability of a rate hike in December is only 50%.

Bloomberg economists Anna Wong and Andrew Sacher said: The FOMC keeping rates unchanged at its October 27-28 meeting was in line with expectations, but subtle adjustments in the wording of the policy statement and Fed Chair Warsh's remarks at the press conference both indicate a modest shift toward a dovish stance by the committee. Notably, Warsh repeatedly said financial conditions have already tightened, but for now does not consider overall financial conditions to be tight; he believes the recent volatility in the AI sector is partly a reaction to the Fed's September rate hike, which also explains the statement's new wording that more information is needed before deciding the next rate move. Taking all the information from this meeting together, we judge the probability of a December rate hike at 50%, versus current market pricing of 85%. We expect credit conditions to tighten further before the December meeting, performing part of the tightening on the Fed's behalf. The baseline scenario is for the FOMC to keep rates unchanged for the remainder of this year.