Macro Bites – Rate Hike: What to Expect from the Fed

On 10/11/26 morning, Fed Governor Christopher Waller [Permanent FOMC Voter] stated at a Money Macro & Finance Society event in London that he would support a 25bps hike at the FOMC’s 12/8-12/9 meeting but added he also might support a 50bps hike if upcoming inflation data runs hotter than expected.  Waller emphasized that his ultimate policy recommendation hinges heavily on the Consumer Price Index (CPI) data for Oct.

Waller Quote of the Day: “If, as I expect, the monthly rate of inflation improves in October, I am leaning toward supporting an increase in our policy rate of 25 basis points.  But if the October CPI inflation data out later today are similar to the past two monthly readings—with core CPI inflation around 0.3% or even higher—then a stronger policy move may be needed. In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting.”

Al-Arabiya reports a joint Qatari-Pakistani mediation proposal has reportedly revived serious back-channel nuclear negotiations between the U.S. and Iran, though public statements from both sides remain deeply conflicted.  Sources told Al-Arabiya the U.S. has reportedly agreed to allow Iran to continue uranium enrichment capped at 3.67% (down from Iran's recent 60% levels) and preliminary arrangements are being discussed for the return of IAEA inspectors to monitor Iranian nuclear facilities.  Stay tuned…

Separately, President Trump made a surprise appearance at the White House briefing room following a meeting with Qatari Prime Minister Mohammed bin Abdulrahman Al Thani at which he stated to reporters that the war in Iran "militarily is effectively over" and that "taking the military action doesn't seem to be a very necessary thing" right now.

The U.S. and China have officially extended their trade war truce by two months (to 1/10/27).  The extension was finalized through formal Beijing announcements and solidifies an agreement struck by Presidents Trump and Xi during their Washington summit. China's Customs Tariff Commission confirmed it will continue to suspend a 24% additional retaliatory tariff on U.S. imports.  However, a baseline 10% blanket tariff remains active on both sides.  The Chinese Transport Ministry delayed charging special port fees on American vessels until January 10, aligning with a reciprocal freeze by the Office of the U.S. Trade Representative on maritime service fees and ship-to-shore crane tariffs.

Singapore has launched a gold vaulting service for foreign central banks and financial institutions, seeking to tap growing demand to diversify where bullion reserves are stored.  The precious metals will be stored in the city-state’s national currency vault (500t capacity) with room to expand as demand grows. Deputy Prime Minister and Monetary Authority of Singapore Chair Gan Kim Yong stated, “Singapore does not aim to replace other gold centers and gold vaulting services, [but] with the growing demand for gold as a reserve asset, I think central banks are also looking for alternatives, looking for more options to strengthen their resilience in terms of their gold reserves.”

Canada’s Budget 2026 proposes a five-year extension of the 15% Mineral Exploration Tax Credit and the 30% Critical Mineral Exploration Tax Credit to March 31, 2032, removing the Mar. ‘27 expiry that threatened junior explorers’ flow-through financing.  Antimony is also being added to the critical mineral credit.  The budget also confirms that the Productivity Mega Deduction, announced in Sept., would raise the deduction rate on Canadian development expenses from 30% to 100%, making development-stage flow-through financings more attractive to investors.