OIL: BP's Olympic Pipeline Partially Restarts

Here is the Statement comparison vs September's. Not much unexpected here except a slight surprise with a hawkish dissent by KC Fed Pres Schmid (as we flagged as a risk in our preview), with Gov Miran again voting for a 50bp cut (no surprise there).

• The first paragraph notes "available" indicators (a nod to a lack of official federal government data releases amid shutdown), mark-to-marking economic activity as "expanding at a moderate pace".
• The statement has to contort the language a little bit around unemployment and inflation to reflect the lack of new data, saying that "recent indicators are consistent" with the trend seen "through August" of job gains having "slowed this year" as unemployment "edged up but remained low".
• Similarly, the balance of risks doesn't change substantively, noting downside risks to employment "rose in recent months" (vs "have risen").
• No change to forward rate guidance as expected, with the end of QT announced in the policy actions paragraph as MNI had anticipated.

• Treasuries little changed on net following the FOMC announcement after briefly resuming downward pressure seen ahead of the decision.
• Cash yields 3-4bp lower on the day.
• TYZ5 briefly dipped 4-5 ticks to 108-05, stopping short of support at 113-04 (Oct 27 low) after which lies 112-26 (50-day EMA), but has reversed most of the move. Technicals point to a bullish structure still intact with resistance at 113-24 (post-CPI high) before 114-02 (Oct 17 high).
• No real additional losses for SOFR futures, SFRM6 leading the day’s losses at -3 ticks having also slipped a little pre-decision.
• ESA sees two-way trading but is also little changed on net, at 6935 at typing. Initial resistance at today’s all-time high of 6952.00, close to projected resistance at 6953.25 (2.00 proj of Aug 1-15-20 price swing). Support seen at 6812.25 (Oct 9 high).

Here is the comparison of the latest Implementation Note vs September's, incorporating the new QT directives. Two key things: one, QT will end only on Dec 1 (not much difference really vs the immediate end expected), and two, MBS reinvestments will be made into Treasury bills (as opposed to across the Treasury curve) - an area of uncertainty going into this meeting.

• Also there was no change to administered rates relative to the 25bp cut in the policy rate (IORB 3.90% as expected with standing repo facility 4.00%).