There was an article posted by the WSJ at 8:52 AM ET saying 'Fed Set to Raise Rates by 0.75 Point and Debate Size of Future Hikes'. Within the article, it discusses some officials "have begun signalling their desire both to slow down the pace of increases soon and to stop raising rates early next year to see how their moves this year are slowing the economy. They want to reduce the risk of causing an unnecessarily sharp slowdown."

Stocks loved the news and we had seen the S&P 500 move around 140 ticks or about 1% to the upside 10 mins post the article being published. The DXY declined by 0.65%. A lovely reaction to the article if you love the volatility. However, the big question is why have markets reacted this way? There have been comments from Fed members, voters and non-voters that have said similar things to the above article, or even explicitly the same. They're even in the article itself citing very old news.

But I have listed some of those comments here, myself.

Powell Comments
September 21st
Hikes may be slowed at some point to assess the effects.
There is a chance that we will reach a particular rate and remain there, but not yet.
Given the high inflation, we believe we will need to raise the Funds Rate to a restrictive level and keep it there for some time.

August 26th
As policy tightens further, it will be fitting to halt the pace of rate rises at some time.

July 27th
It is likely that slowing increases will be appropriate at some point.

Mester Comments
August 27th
Fed's Mester: Policy rate needs to be increased to a little above 4% and hold all of next year.

August 26th
I believe rates should be raised above 4% and held there.

Fed's Kashkari
October 19th
My best guess is that the Fed can pause rate hikes sometime next year.

October 10th
Fed's Evans
A policy rate slightly higher than 4.5% should allow the Fed to pause and tolerate a few not-great inflation reports while supply improves.
The Fed is facing a difficult messaging problem as it nears a decision to halt the pace of rate increases.
I see the target rate needing to rise a bit above 4.5% by early next year and remaining there as the Fed takes stock.

October 14th
Fed's Bullard
The appropriate rate range should be in the 4.5%-4.75% by the end of the year, with any further increases in 2023 being data dependent.

The obvious point being is the old news, or should i say a summary of old news put together, led to the market rally. Usually, we'd see a new bit of news, something out of nowhere where that would have moved the markets like what we saw earlier. If we had a bit of text in the article saying "some Fed officials saw a rate cut in early 2023", that would be a huge shift from what the current expectation is.

October 6th
Fed's Waller
I anticipate further rate increases until early next year.

September 9th
The Fed should raise interest rates until at least early next year.

See, even the above headline from Waller even though he's not a voter, would have made sense to go "Hell Yeah!" if there ever was a time.

So What Is The current expectation from markets of the Fed?
Well, quite a few if not nearly all Fed members are looking at the Fed Funds rate within the range of 4-4.75% (Bullard being at the high end), and then at some point to hold rates next year. It's knowing when the Fed could decide to hold rates that is not completely concrete. If we do go off of the estimated Fed Funds rate range, you're looking at at least a 75 BPS  hike in November taking the rate to 4%, then if Bullard had it his way another 75 BPS to reach 4.75%. Or the less hawkish route would be a 75 in November, then a 50 in December, then a 25 in January and then a pause. That's just potential scenarios, which anyone can try and work out themselves.

That is something you don't need to read from an article to make you pump the gas. My point is if we have already had a lot of this news before from a variety of Fed officials way before this, why are the markets moving now?

To add some more info to the Fed's fight against inflation, the Fed has moved the touchdown line to where they thought they need to be in the past. We went from around 3% where the rate should be, to markets looking at 5%-6%. So either we reach a super restrictive level to quell inflation, which would likely lead to a recession, or there is an expected pause in rates near the Fed's current target range.