Federal Reserve Meeting Key Points — Voting Will Reveal Divisions, Powell May Raise the Bar for Rate Cuts

On December 11, the key points of the Federal Reserve meeting are as follows:

Policy Statement

1. Barclays Bank: It is expected that the statement will include hawkish language, implying a pause in rate cuts in January next year.
2. JPMorgan Chase: The wording of the statement may be adjusted to “monitoring the magnitude and timing of further adjustments,” which would be a subtle change, suggesting a reduced likelihood of rate cuts in subsequent meetings.
3. Wells Fargo: The statement is expected to signal further raising of the rate cut threshold and imply that “keeping rates unchanged” is the current assumption of most committee members.

Voting Divergences

1. BNY Mellon: The dot plot is likely to confirm recent internal disagreements within the FOMC regarding policy stance, with expectations that members’ views on policy direction for 2026 will diverge significantly.
2. JPMorgan Chase: It is anticipated that at least two votes will oppose rate cuts, advocating for no change, and one vote will call for a larger rate reduction. The dot plot is expected to show one rate cut in each of the next two years.
3. FP Markets: Disagreements with hawkish positions may emerge at this meeting, involving participants such as Schmidt, Goolsbee, Musalem, and Powell. If rate cuts occur this week, another is expected next year.

Powell’s Statements

1. Bank of America: Powell may avoid giving clear hawkish guidance, with communication strategies possibly focusing on real interest rates or data dependence.
2. Danske Bank: Powell is expected to continue the stance from the October meeting, explicitly opposing market expectations of consecutive rate cuts.
3. Deutsche Bank: Powell is likely to emphasize that the hurdle for further rate cuts in early 2026 is high, signaling a short-term pause in rate reductions.
4. Former Fed Vice Chairman Brinded: It is expected that Powell will articulate rate cuts similarly to the last press conference, warning markets not to preset the Fed on a continuous rate cut path.
5. Morgan Stanley: Powell may hint that the phase of monetary policy adjustments has ended, and any future actions will be based on assessments at successive meetings and the latest data.

Others

1. Bank of America: It is expected that the Fed will announce starting January to purchase Treasury bills worth $45 billion monthly, with maturities of one year or less, as part of “reserve management operations.”
2. Wells Fargo: It is anticipated that this meeting will not decide on “reserve management operations,” but will instead favor announcing the plan at the March meeting. (Jinshi)