Following the blackout period and last week's Fed meeting, the momentum behind officials' statements continues to grow. Over the weekend, it was the turn of the more dovish officials, with Christopher Waller clearly criticising Fed Chair Jerome Powell, Commerzbank's FX analyst Michael Pfister notes.

All options were left open for December FOMC

"He emphasised that, while a lack of data was an argument for slower interest rate cuts, it did not rule out interest rate cuts altogether. Unsurprisingly, he believes that another interest rate cut in December would be the best scenario. As usual, Stephen Miran, the governor appointed by Donald Trump, went one step further, emphasising his willingness to continue voting for larger interest rate cuts. He also said that monetary policy would remain far too restrictive."

"Less dovish officials (who were not appointed by Trump) were, as expected, somewhat less explicit in their comments. Although the latest interest rate cut was considered appropriate, all options were left open for December. However, only the most hawkish members argued against an interest rate cut in December, given the ongoing high inflation. Therefore, the most likely scenario remains a further interest rate cut of 25 basis points in December."

"Nevertheless, the discrepancies among decision-makers are likely to grow in the coming year. The more dovish members seem to sense an opportunity to take a more dominant stance at the moment. Therefore, we are less certain than the market that interest rate cuts have really become less likely in the coming year after Jerome Powell's rather hawkish press conference last week, and whether the USD's strength in recent weeks is really justified."