Three Fed Dissents Signal a Hike Is Closer Than Markets Think

Three Federal Reserve officials voted for an immediate rate hike at the July 29 FOMC meeting, and markets have not priced that dissent seriously enough. The 9-3 vote to hold rates at 3.50-3.75% looks like a comfortable majority until you consider that Hammack, Kashkari, and Logan all broke in the same direction simultaneously, according to the Federal Reserve's July 29 press release. That has not happened in at least two years. Key Takeaways Three FOMC members (Hammack, Kashkari, Logan) dissented for an immediate 25-basis-point hike at the July 29 meeting, the most concentrated hawkish dissent in at least two years. The 2-year Treasury yield at 4.28% implies roughly one cut over the next 12…