TS Pulse: Ride the wave

The US midterms have understandably hijacked the news flow, but there’s been plenty of other news to consider in the last week. 

• Federal Reserve voted 10-2 to hold rates, as expected. The two dissenters voted for a hike and the accompanying statement showed 25bps was discussed, leaving the market believing a move is on the cards for December. The Fed is also moving to just six rate-setting meetings by 2028, but details are yet to be published on how the adjustment will come.   
• The ECB also held rates, as expected, but, while they acknowledged that higher energy prices pose upside risks to inflation, they also said that “underlying inflation has remained broadly stable so far and wages do not show a material response at this stage”. Again, the market expects a hike in December, but the 2027 peak has come down by around 15bps, with 2-3 hikes priced. Before the meeting, President Lagarde had announced she would step down from her position in February, rather than October when her term was due to end.
• US PCE climbed to 3.1% in September, as expected, from 3% in August, supporting the expectation of that Fed hike in December, as did GDP growth for Q3 coming in ahead of expectations at 3.4%.
• EU growth came in stronger than expected in Q3 at 0.4% compared to 0.2%, but France's contribution was a 0.1% contraction versus expected growth of the same amount. Germany's 0.2% was 0.1% ahead of expectations, but Spain and Netherlands both recorded 0.6% despite rising borrowing costs and the energy price pressures. In an unscheduled move, Fitch moved the outlook on France's A+ rating to negative, with the current government debt trajectory and weakening growth prospects the main worries.
• UK net mortgage lending decreased from £4.2bn in August to £3.9bn in September, as the rates on both newly drawn and the outstanding stock of mortgages rose by 3bps. That may have had an impact on Nationwide reporting house prices showed no growth in October, dropping the annual price index to just 0.5% – the lowest rate since January 2024.

Source: Bloomberg; pricing as per 4 November 2026

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