Federal Reserve Interest Rate Meeting Preview:

There are various opinions about tonight's FOMC and Powell's subsequent speech, with some suggesting that the previous prices have already factored in 25bp + hawkish comments, while yesterday there was a surge due to Hasset's remarks about increasing the pace of rate cuts in the future. The market is anticipating his succession, trading on those expectations.

In last month's meeting, although there was a 25bp rate cut, there were already two dissenting votes:

One was Miran, who wanted a 50bp cut instead of 25bp, and the other was Jeffrey Schmid, who wanted no cut at all.

In the history of the Federal Reserve, decisions are usually unanimous or have only 1 dissenting vote. Two dissenting votes indicate internal disagreement over the rate cut (although Miran does not actually oppose the cut but believes it is insufficient).

This time, Powell also needs to keep the dissenting votes under 2; if it exceeds two votes, the market will interpret it as a severe division within the Federal Reserve, which would undermine the credibility and sustainability of future policies.

After the December meeting, there are two months of significant data (non-farm employment, CPI, etc.) before the January meeting.

Powell faces a dilemma: if he takes a hawkish stance and tells the market that he will be cautious in the future, then the January meeting might pause any rate cuts, but he cannot be too definitive, as if the upcoming data suddenly worsens, the Federal Reserve would have to backtrack and continue cutting rates.

Just like this time, although it was previously stated that a rate cut this month was not a done deal, after the earlier data was released, the trend toward a rate cut began to become clearer.

Therefore, the market wants to see how Powell will manage expectations for January, possibly sending out strong signals to suggest that the threshold for a rate cut in January is very high, depending on whether the specific wording leans towards dovish or hawkish, but this does not affect the decline in the financial markets. #美联储FOMC会议