Incredible twist! Trump's appointees collectively "dove to hawks," Powell faced a 5-vote siege for interest rate cuts this week, igniting the largest divergence in history in global markets!
This week's Federal Reserve meeting has made Wall Street's nerves tense! Although interest rate cuts are already a done deal, everyone is betting on Powell adopting a "hawkish rate cut"!
What is a hawkish rate cut? It means lowering the interest rate this month, but stubbornly refusing to budge: thinking about continuing to ease in January? Not a chance.
After all, the internal debate at the Federal Reserve is becoming a mess, with doves eager to inject liquidity to rescue the market and hawks insisting on controlling inflation, Powell's task of balancing is simply a "hellish difficulty."
Bank of America directly threw a bucket of cold water: does Powell want to replicate the "Tai Chi balance of expectations" from October? Unlikely!
After all, a bunch of key data is waiting to be released between two meetings, and some are stuck due to the government shutdown and haven't been updated.
Experts at JPMorgan also added: after the rate cut, interest rates are almost touching neutral levels, and whether to ease further depends on the strength of the labor market, it's not something that can be decided on a whim.