🚀 Global Breathlessness: The Federal Reserve may stage a "hawkish rate cut" tonight, with unprecedented internal division!
At 3 AM Beijing time on Thursday, the financial markets will face a historic decision—markets expect the Federal Reserve to cut rates for the third consecutive time, bringing the rate range down to 3.5%-3.75%. However, behind what seems to be a settled “dovish” stance, an unprecedented internal division is stirring the direction of policy.
⚠️ This time, a rate cut may signify "the beginning of tightening"
“hawkish rate cut” has become a hot topic in the market—lowering rates while hinting that “easing may be coming to an end.” Rather than a market rescue, it is more a difficult calibration of policy stance.
📊 Four focal points that will determine market direction
1️⃣ Powell's “verbal game”
The post-meeting statement and press conference wording will be key to judging the future path. Goldman Sachs warns that the statement may reiterate that “the magnitude and timing of further adjustments depend on data,” meaning the threshold for another rate cut has been significantly raised.
2️⃣ The divided dot plot and storm of dissenting votes
This dot plot may show an upward shift in the rate path, and the FOMC vote may see multiple dissenting votes:
· Kansas City Fed President George (who opposed last month) is expected to oppose again;
· Over one-third of economists predict St. Louis Fed President Bullard will also oppose, citing persistent inflation;
· Governor Waller may demand a cut of 50 basis points, continuing his “dovish dissent.”
3️⃣ The “dilemma of inflation and employment”
While the core PCE inflation slightly decreased to 2.8% in September, it remains significantly above the 2% target. Meanwhile, the employment market is showing initial signs of fatigue: October hiring slowed, and layoffs increased, causing the policy balance to swing violently between “controlling inflation” and “maintaining employment.”
4️⃣ A quiet shift in the balance sheet?
After halting the balance sheet reduction in October, the Federal Reserve may restart limited bond purchases due to market liquidity pressures—though not termed QE, it could become an important signal for liquidity expectations.
💥 Summary: The market is waiting for more than just a rate cut
Tonight, the Federal Reserve is not only deciding on rates but also defining the next policy cycle. Will it continue easing, or will it turn? Global markets are ready to welcome volatility triggered by “verbal” cues. After the decision, the real game has only just begun. $BTC $ETH
