Key Highlights

● The Fed decision is due on Wednesday, October 28, after a two-day meeting.

● The Nasdaq Composite sank 694.00 points, its steepest drop since June 5.

● Initial jobless claims fell to 194,000, below the 200,000 expected.

● Fed Chair Kevin Warsh said, "It's a new chapter at the Fed."

On one of the most turbulent days for stocks in months, the Federal Reserve said nothing. Fed officials were not heard speaking publicly on Thursday, October 22, because policymakers are in their customary blackout period ahead of the Federal Open Market Committee meeting on October 27 and 28. The rate decision is due on Wednesday, October 28.

The silence came as the Nasdaq Composite sank 694.00 points, its steepest drop since June 5, and Treasuries rallied sharply, sending the 10-year yield back below a closely watched threshold for the first time since September 22.

What the blackout is

The Fed's blackout rules bar policymakers from speaking publicly about monetary policy or the economic outlook in the days leading up to each policy meeting and until the day after it ends. The period typically begins on the second Saturday before a meeting.

The aim is to avoid sending mixed signals or moving markets just before a decision. It means investors must rely on data, market pricing and earlier remarks to gauge the Fed's thinking.

What Warsh said before going quiet

Among the most widely cited recent comments were those from Fed Chair Kevin Warsh at an earlier International Monetary Fund meeting in Bangkok. "I don't prejudge meetings," he said. He added: "It's a new chapter at the Fed, and we're not in that business anymore."

The Fed raised rates in September, its only hike this year.

Markets did the talking

Without Fed commentary, traders adjusted their own expectations. The probability of a hike next week fell to a low level, and reports said markets were overwhelmingly pricing a hold as of Thursday evening. Markets still expect about one more increase before year-end.

The bond rally reflected a flight to safety from stocks. "Treasuries rallied overnight as tech stocks came under pressure amid renewed AI valuation fears," a rates strategist said. The 10-year yield posted its biggest one-day drop since August 2025, according to some data providers, though others dated the milestone to March 2023.

Data the Fed will weigh

Thursday's data gave policymakers mixed inputs. Initial jobless claims fell to 194,000 for the week ended October 17, below the 200,000 expected and the fewest in about three months. Continuing claims rose by 25,000 to 1.728 million. The Conference Board's Leading Economic Index was unchanged for September.

Energy prices are a concern. Brent crude climbed to $113.17, its highest since May 4, after Houthi attacks in Saudi Arabia. Procter & Gamble (NYSE:PG) warned of a $1.4 billion after-tax commodity headwind. Still, one market commentator noted: "If oil is about to spark an inflation wave, the bond market hasn't heard about it."

Financial conditions also shifted. A 5-year inflation-protected Treasury auction was weak, and credit default swaps on Meta Platforms (NASDAQ:META) hit a record, as investors questioned the financing of AI spending.

When the Fed's silence ends

The blackout ends after the decision on October 28, when the Fed chair customarily holds a press conference. Before then, Friday brings S&P Global purchasing managers' surveys and the final University of Michigan sentiment reading. After the decision, third-quarter GDP and September PCE inflation arrive on October 29. Investors will be listening closely for any hint on whether September's hike was a one-off or the start of a series.