(from Tim: this was kindly shared by Sloper Craig Shapiro; this is unedited, except for some boldface I’ve added and some modifications for relative time reference.)

Let’s cut right to the chase. We have another Fed meeting tomorrow and there has been a growing belief in markets, exacerbated by comments from the WSJ’s “Fed Whisperer,” that a step-down in the Fed’s rate hiking agenda is imminent come the next Fed meeting in December. The equity market has run hard on this idea that a step down in hiking is akin to bringing forward the end of the tightening cycle. Stocks have bounced hard off the lows from last month’s once again hot CPI print on back of this belief, which has come along with discussions of stepping down rate hiking cycles in Europe, Canada, Australia and more dovishness from the BOJ and BOE. There is a dovish smell in the air and the equity market has picked up the scent. When you add in stronger seasonality, the prospect of a Republican sweep next week which will bring about gridlock in DC (something equity investors tend to love) and the potential for yet another Santa Claus rally, many believe the bottom is in. Shorts have been covered, puts are gone, skew is back to the lows and the FOMO chase is starting to resume. But what justification would the Fed really have to tell investors tomorrow that a step down in tightening is coming at the next meeting? Have we seen any momentum that has gotten them closer to their goal of stomping out inflation? In the words of ESPN’s Lee Corso, I think the Chairman Powell is ready to deliver a “Not So Fast My Friends” moment to equity markets. Proceed with caution.