Let's talk about this rate cut

As expected by the market, the recent monetary policy meeting cut interest rates by 25 basis points. The dot plot released after the meeting shows that the Federal Reserve's decision-makers' interest rate path predictions are consistent with those from three months ago, still anticipating a 25 basis point cut next year. This means that the rate cut actions next year will be significantly slower than this year.

In addition, three officials at this meeting expressed dissent regarding the 25 basis point cut. The reason is that, on one hand, inflation has stagnated on the downside, and on the other hand, the job market has clearly cooled down. There is a significant divergence among the voting members regarding which issue, inflation or the job market, is more concerning, making this meeting one of the most divided in recent years.

Although the Federal Reserve will have a new leader in May next year, the Chairman of the Federal Reserve only holds one vote in the FOMC. Unless Trump can replace more voting members, it will be difficult to fundamentally change the FOMC's decision-making path by merely changing the Federal Reserve Chairman.

So overall, the expectations for rate cuts next year are not very optimistic.