$BTC The U.S. Federal Reserve Board is set to announce its interest rate decision after the monetary policy meeting on the 10th. The latest data from the Chicago Mercantile Exchange's FedWatch Tool indicates that the probability of a 25 basis point cut at the Fed's December monetary policy meeting is close to 90%, and a rate cut is widely expected in the market.

The Federal Reserve began its rate-cutting cycle in September last year, and by November this year, it has cumulatively cut rates by 150 basis points. However, due to the difficulty of balancing the job market and inflation targets, as well as concerns about the bubble in artificial intelligence (AI) investment, the rate-cutting 'tool' is becoming increasingly 'ineffective'.

Inflation and employment are difficult to manage simultaneously.

The two main missions of the Federal Reserve are to promote maximum employment and maintain price stability. However, at the monetary policy meeting in October of this year, Federal Reserve officials had already shown significant disagreement on whether to further cut rates in December.

Based on public speeches since November, Chicago Federal Reserve Bank President Austan Goolsbee has expressed greater concern about inflation risks, while New York Federal Reserve Bank President John Williams said that achieving the Federal Reserve's 2% inflation target requires 'not posing undue risks to the goal of maximum employment.'

The U.S. (New York Times) reported on the 8th that the Federal Reserve currently seems to be further away from its policy goals than at the beginning of the year: inflation levels have slightly risen, and it remains unclear whether the effects of tariffs on consumer prices have fully manifested; monthly job growth has significantly slowed, and the unemployment rate has slightly increased.

Data from Automatic Data Processing Inc. shows that in November, U.S. private sector jobs fell by 32,000, a significant deviation from previous expectations. A report from job consulting firm Challenger, Gray & Christmas indicated that since the beginning of this year, as of November, U.S. employers have laid off over 1.1 million workers, the highest level for the same period since 2020, representing a 54% increase compared to the same period last year.

Data released earlier by the U.S. Department of Commerce showed that the personal consumption expenditure price index rose by 2.8% year-on-year in September, higher than the previous month's 2.7%. Ernst & Young's chief economist Gregory Daco emphasized that inflation driven by trade policies and tariffs is still 'tricky'.

The market generally believes that the Federal Reserve will cut interest rates to reverse the slowdown in job growth at the current inflation level. However, former Federal Reserve Vice Chairman Richard Clarida stated that the Federal Reserve must send a clear signal to the market that it is highly focused on stabilizing prices. MIT Professor Deborah Lucas said, 'The mechanisms through which monetary policy has a significant direct impact on employment have not been empirically validated enough,' hoping that the Federal Reserve will focus on this single goal of inflation.

External shocks impact independent policy.

For months, U.S. President Trump has repeatedly criticized Federal Reserve Chair Powell for the Fed's failure to cut rates in a timely manner. He has stated that due to the Fed's failure to lower interest rates, the federal government has been paying enormous interest on its debt.

Trump advocates for accelerating interest rate cuts to lower bond yields and drive down various loan rates, but the bond market seems 'not to buy it.' Bloomberg reported on the 9th that the yield on the 10-year U.S. Treasury has risen by more than 20 basis points from its low in October this year, which is quite unusual given the backdrop of the Federal Reserve possibly cutting rates again.

Christina Hooper, chief market strategist at hedge fund giant Invesco, pointed out that compared to stock investors who prefer loose monetary policies, bond investors are more focused on fiscal sustainability and Federal Reserve independence. 'Lowering the federal funds rate does not ensure that long-term rates will decline.'

Bloomberg recently cited informed sources reporting that, in the eyes of Trump and his advisors and allies, Kevin Hassett, director of the White House National Economic Council, is the top candidate to become the next Federal Reserve Chair. The U.S. (Politico) reported that Trump stated that immediately cutting interest rates upon taking office would be the 'litmus test' for his candidate for Federal Reserve Chair.

Although seen as someone who would 'cater' to Trump by significantly cutting rates, Hassett himself stated on the 8th that plans to pre-determine the interest rate path for the next six months are 'irresponsible,' and the Federal Reserve Chair needs to adjust policies based on data.

Trump previously attempted to remove Federal Reserve Governor Lisa Cook. The U.S. Supreme Court issued an order in October allowing Cook to remain in her position temporarily until January 2026 when the court will hold oral arguments on whether Trump has legal grounds to dismiss her.

The impact of AI variables is difficult to predict.

The AI investment boom is currently an important driving factor in the U.S. stock market and even the economy, but the transformation of AI technology is also impacting the U.S. job market. Many analysts point out that if the Federal Reserve needs to effectively guide the economy through monetary policy, it cannot ignore the 'variable' of the AI boom.

The UK (Financial Times) pointed out that there are hawkish economists supporting the view of relatively strong U.S. economic growth, but there are also dovish economists who believe that the current U.S. economy is heavily reliant on the AI investment boom.

The U.S. Business Insider reported that the stock prices of tech giants are increasingly driven by changes in monetary policy, with related companies' annual AI capital expenditures heavily reliant on a low-interest-rate environment. Ruchir Sharma, chairman of Rockefeller International, warned that sustained strong growth in AI-driven investments could push inflation higher again, and the Federal Reserve's long-standing failure to achieve inflation targets means that 'any signs of interest rate hikes' could trigger a bubble burst.

An article from the American Enterprise Institute warns that if the AI boom ultimately proves to be a bubble and bursts, the Federal Reserve will be questioned for 'negligence' for not 'applying the brakes' in advance. For the Federal Reserve, it is challenging to successfully navigate the direction of U.S. economic development given the uncertainties in predicting the progress of AI.

Michael Hartnett, chief strategist at Bank of America, stated that the S&P 500 index is approaching historical highs. If the Federal Reserve continues to send dovish signals, it may suggest that the degree of economic slowdown exceeds expectations, putting market optimism to the test.

The U.S. Quartz finance website reported that the current weakness in the U.S. job market may mainly stem from companies significantly reducing labor demand through AI. If the Federal Reserve responds by cutting interest rates, it may instead accelerate AI investments and the replacement of related jobs, exacerbating structural pressures in the labor market. #Bitcoin plummeted, with 290,000 people liquidated #加密市场反弹