Being intellectually consistent, they are done hiking/Autos/Helpful company comments/Sentiment/Germany

If Jay Powell is now going to be intellectually consistent, the Fed is done hiking rates. If a 'tightening of financial conditions', aka, the rise in long term interest rates, is the reason they are done for now as he basically said, really the only reason why we would see a notable drop in long term rates is if the economy slows a lot, which then the Fed would be discussing cutting instead. That said, we know QT continues on so the monetary tightening does too. As to a question of where their balance sheet goes from here, Powell basically said as I paraphrase, 'bank reserves are not close to scarce and QT is having only a small impact on the rise in long term rates,' thus no change here in the balance sheet shrinkage plan. The former is now a big debate as to where they would be scarce and I believe QT is a large factor in the rise in longer term rates, and globally too. 

I want to emphasize that rates 'might' drop if the economy slows because if the worries about Treasury supply is a reason for the rise in long rates, a slowing economy would shrink tax receipts and the budget deficit would get even larger and in turn leading to even more supply. There is no easy way out. Global bond yield are down across the world post FOMC meeting the dollar index is having its worse day percentage wise since July. 

We also saw auto sales yesterday for October and they totaled 15.5mm at a SAAR. That was 100k less than expected and still running below 2019 levels where it came in at 16.55mm in October 2019. Wards said "October's results were below expectations, apparently due to weakness at the end of the month. Most automakers finished below mid-month projections for each, thus the industry's overall weaker results can't be blamed on underestimating the impacts to Ford, GM and Stellantis from the strike-related plant shutdowns. The results show that other automakers did not benefit from losses at the Detroit 3."