$AIA The Federal Reserve's reversal script is more thrilling than a roller coaster.
Just a few days ago, the consensus was all about "no interest rate cuts in December," which brought the market to a freezing point; just a few days later, CME data skyrocketed the probability of a rate cut to 81%, burying good news! 📈
San Francisco Fed's Daly has been quite insightful with this move. Although she doesn't have voting rights this year, she and Powell almost never sing in discord. Now she suddenly jumps out to say, "The labor market could suddenly deteriorate, we need to cut rates," which clearly indicates some prior communication, right?
The Fed is best at the tactic of "hawkish talk and dovish action." You haven't forgotten the "cut first, pause later" approach from 2019, have you? Now, with good news flying everywhere, the actual impact won't be counted until the December decision is finalized. Acting too early risks being taken advantage of; just sit back and watch the show!