Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon. Today is Wednesday, October 29th, and I'm your host, Kim Khan. This is a special Fed edition of Wall Street Lunch.

Death, taxes, and today's interest rate cut. To the surprise of almost no one on Wall Street,

the Federal Reserve cut rates by a quarter point for the second time this year. It also 86th QT.

But just as everyone was settling in for a ho-home press conference, Chairman Jay Powell

blindsided traders out of the gate, saying another cut in December isn't a gimmy. That's sent

stocks lower and treasury yields

higher. In his opening remarks, which are usually just a recitation of the statement,

Powell said a further reduction in the policy rate in the December meeting is not a foregone

conclusion. Far from it. T.S. Lombard, economist Dario Perkins, called those words kind of

unnecessary and strongly loaded.

Powell went on to explain that the committee has strongly differing views about what the future

looks like, pointing to more hawkish signs of stronger economic activity, and a labor market

that's not clearly declining quickly. We've cut 50 basis points and there's a sense for some of

let's pause here, he said.

He also said a lack of data could impact the December decision, likening it to driving in a fog and

slowing down. By the time Powell was done, the odds of the Fed keeping rates steady at the last

meeting of the year surged to 40% from below 10% the day before. The odds of another cut fell to

55% and a 5% chance of a hike even appeared.

Back to today's move, the FOMC lowered the Fed funds rate target to 3.75 to 4% the first time

it's been below 4% since late 2022. Two officials dissented, White House picked Stephen Myron

voted for a half-point cut, and Kansas City Fed

...