Recently, the market's focus has been on the FOMC meeting on the 11th, where a 25 basis point rate cut has become a high-probability event. The most critical aspects are the dot plot to be announced, Powell's statements, and whether to expand the balance sheet, these three things.
Dot plot: Determines the future interest rate cut path. Currently, Nomura and Morgan Stanley have also adjusted their rate cut predictions today, basically one cut in December, and two cuts in 26, from the current 3.75–4% to 3–3.25%
However, at the beginning of 26, the announcement of the new Federal Reserve chairman caused a lot of disturbances to the interest rate cut path for 26;
Post-meeting statement:
Neutral statement, in line with expectations, but with limited impact on the market
A hawkish stance has a negative impact on the market.
Therefore, paying attention to Powell's speech after the meeting is of utmost importance.
Whether to expand the balance sheet: Apart from the stance on the interest rate cut path, whether to mention when to expand the balance sheet is also a core focus of attention;
The difference between quantitative easing and balance sheet expansion is that balance sheet expansion involves purchasing short-term bonds, which will improve liquidity and enhance risk appetite. Coupled with the consumption of the TGA account after the government reopens, the combined effect on liquidity will greatly benefit U.S. stocks and cryptocurrencies.
After that, the non-farm payrolls on the 16th, the CPI on the 18th, and the Bank of Japan's interest rate hike on the 19th are also significant hurdles; December is destined to be a turbulent month, and a steady strategy is to wait for events to settle before placing bets. The market remains open, and opportunities will always be available.
