The giant whale institution once again successfully crashed the market using news and uncertainties.

In fact, the market currently underestimates the probability of an interest rate cut in January. Even if there is no rate cut in January, it has been widely speculated. This week's employment and CPI data will be key variables.

Master Bao's statement after the December interest rate meeting was interpreted by the market as a signal of the "🦅" faction. However, UBS's latest report indicates that the market may be prone to over-interpretation, and the upcoming employment and CPI data will provide key judgements for the January rate cut.

On Tuesday, non-farm reports for both October and November will be released simultaneously. This rare arrangement will provide the FOMC with a more comprehensive assessment of the labor market. UBS expects that due to the federal government's delayed retirement plan (DRP), non-farm employment in October will decrease by 20,000, while November will increase by 45,000. More importantly, the unemployment rate in November may rise to 4.5%, continuing the trend of labor market slowdown.

The November CPI data will be released on Thursday. However, due to the government shutdown leading to data collection interruptions, the CPI report may have significant noise.

Has Master Bao ruled out a rate cut in January, or is the market overreacting?

The market's interpretation of Master Bao's "🦅 faction" at the December press conference may be overly cautious.

UBS analysis suggests that Master Bao's statement actually implies continued room for rate cuts. Master Bao clearly pointed out that when inflation and employment risks tend to balance, the federal funds rate should be close to 3.0% rather than 3.5%, indicating that even if inflation is slightly above target, there is still room for policy rate reductions. #巨鲸动向