Treasury Action: Treasury yields have slipped from earlier highs
Treasury Action: Treasury yields have slipped from earlier highs, supported in part by reports the FOMC may pause its rate hikes in early Spring. The front end is leading the dip. The weaker data and the impending Thanksgiving Day "long weekend" are supporting a bid as well. While a 25 bps December tightening to a 2.25% to 2.50% band is pretty close to a done deal, MNI notes (citing unnamed people at the Fed) policymakers could consider pausing its gradual tightening bent in early spring. Of course growth and inflation will be the major determinants of the decision making process, along with the markets and any exogenous factors. Analysts're forecasting continued solid growth into 2019 with a 3.0% GDP growth pace in Q4, with y/y core inflation holding a 2% handle. The FOMC will have increasingly difficult decisions to make in 2019 as the policy rate approaches the 3% rate which several on the Committee believe is the neutral rate. However, it's also the case many would be willing to let the rate rise above that level for a period of time. Also complicating the decision will be the new Fed voters, including hawks George and Rosengren, and doves Bullard and Evans. Remember too, all meetings will be "live" in 2019, as each will include a press conference. Analysts're forecasting a 25 bp hike in December, and another in March.