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(Today's Smart Brevity count: 1,189 words, < 5 minutes.)
Illustration: Eniola Odetunde/Axios
Fed chair Jerome Powell almost rocked the boat during the FOMC's October press conference on Wednesday after announcing a third straight cut to U.S. interest rates.
What happened: Powell initially said it would take a “material reassessment” in the outlook for the Fed to change its view that no further rate cuts were needed.
Quick take: That meant the Fed's rate-cutting cycle went from pause to "pause lite," DRW Trading rates strategist Lou Brien tells Axios.
The big picture: "Pause lite" is also an apt description for the status of the global economy's two major risks — the U.S-China trade war and Brexit.
Why it matters: "It can be said that Powell thinks there will not be any reason to ease again in the short or medium term, but that he can be convinced to ease if things don’t go right," Brien adds.
Between the lines: Rick Rieder, BlackRock’s CIO of global fixed income, asserts that the Fed's policy rate is now just right and is "delivering a very powerful dose of the 'right stuff' from a policy perspective."
Yesterday I noted that the yield curve had steepened significantly this month, with yields on the 3-month and 1-month Treasury bills falling meaningfully below the 10-year note.
Why it matters: The Fed's $60 billion a month Treasury bill purchase program, announced as a "technical" salve to calm the $2 trillion U.S. repo market, looks to have provided some assistance in the steepening.
Of note: An inverted yield curve is a sign of an unhealthy economy and typically precedes a recession.
What to watch: Rieder says the Fed is pushing all the right buttons.
The Fed has been very predictable the past 10 years.
There was good news and bad news in the U.S. third quarter GDP report released Wednesday.
On one side: GDP growth slowed less than expected, dipping to 1.9%, which is above expectations of 1.6% growth.
On the other side: Business investment was negative for the second consecutive quarter, falling 3%, which follows a 1% decline in the previous quarter.
Apple delivered a generally positive earnings report on Wednesday, with CEO Tim Cook telling Reuters that iPhone 11 was off to a "very, very good start," despite sales falling 9.2% in the quarter, continuing a pattern that has been in place for the past year.
Why it matters: The iPhone is the bulk of Apple's business and critical to driving demand for its other products.
The intrigue: An earlier report from Bloomberg, citing unnamed sources, said Apple expects iPhone sales to return to growth next year, thanks to the introduction of 5G. But the company will be entering the 5G arena at least a year behind companies including Samsung and Huawei.
Facebook stock rose nearly 4% in after-hours trading after the tech giant again shrugged off controversy and beat Wall Street expectations on earnings per share and revenue.
Why it matters: Facebook has faced growing backlash from users, Congress and attorneys general across the country for its growing size, handling of user data and most recently its refusal to censor false political ads.
By the numbers: Facebook's revenue rose 29% to $17.65 billion from $13.73 billion a year ago. Advertising sales accounted for 98% of total revenue.
Be smart: Axios' Sara Fischer notes that Facebook has been warning for several quarters that ad growth (where nearly all of its revenue comes from) is expected to slow late this year due to saturation in its main News Feed.
The Treasury Department announced Wednesday that it was looking into releasing two new maturities — a 50-year and 20-year bond.
Why it matters: The new issues would help offset the increasing share of Treasuries that U.S. financial institutions have had to buy recently, largely as a result of decreasing foreign buyers and the Trump administration's increasing deficits.
Context: The glut of government debt has been blamed for some of the problems in the repo market and for weak auctions this year.
What's next: Per a Treasury press release...
"Treasury is considering a range of potential new products that includes a 20-year bond, an ultra-long bond such as a 50-year, and a floating rate note linked to the Secured Overnight Financing Rate."
"Overall, primary dealers viewed the potential introduction of a new 20-year bond favorably in the context of increased financing needs beginning in FY2021."