The jury is still out for the next FOMC meeting in November where the market is factoring in 38% chance of another 50bps cut. While the Fed did move aggressively in September, there is no guarantee that the Fed would have to cut by the same magnitude again with Fed Chair Powell indicating that there is no preset path to easing. Moreover, between now to the next meeting, the Fed has to consider two sets of NFP prints and arguably, sentiment around the US Presidential elections (which would have concluded before the FOMC meeting). Focusing on economics, we think that the gap between the prescribed FFR with the current FFR may be a key decision factor between a 25 or 50bps cut. Based on our model, the FFR less prescribed rate gap was sizable (>100bps too high) in August, but this gap has since dropped to around 70bps. Assuming no material deterioration in labour market and inflation conditions in the coming few weeks, there may also not be any urgency for the Fed to deliver another 50bps in November. Note that this gap would be largely closed if the Fed delivers another 50bps of cuts (25bps in November and another 25bps in December) by the end of the year as communicated.
In order to tilt the odds firmly towards 50bps, the unemployment rate would likely need to rise close to 4.5%. For a similar effect, NFP would probably need to register a sub-100k print without any significant upward revisions for the preceding two months. A further drop in inflation would provide more leeway for the Fed to act, but probably would not add urgency for accelerated easing. Aside from economic fundamentals, sentiment matters. The current backdrop of Fed easing and hopes from Chinese stimulus is buoying sentiment. With financial conditions still loose, it is not obvious that the Fed would need to go even faster than currently priced into order to boost the economy. 
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