Fed December rate hike odds near 72% as the midterm vote lands and the 10s2s curve flattens

Election Day is landing on a Federal Reserve that cannot cut, and the market's honest answer to that contradiction lives in a curve, not in a headline. The October 28 meeting held the target range at 3.75%-4.00% on a 10-2 vote, with Hammack dissenting for a hike, according to Advisor Perspectives, and federal-funds futures now price roughly 72% odds of a quarter-point move at the December 8-9 meeting. That is the unresolved hawkish hold entering today's midterm vote: a central bank forced to stand pat, traders forced to buy the hike, and a nominal economy stout enough to keep both in place.

Key Takeaways The Federal Reserve held at 3.75%-4.00% on October 28 by a 10-2 vote, and futures price r…