Federal Reserve's Year-End Showdown, "Hawkish Rate Cuts" Almost Certain

BlockBeats News, December 10th, Beijing time, at 3 a.m. tonight, the Federal Reserve will announce its final interest rate decision of the year, revealing the difficult choices amid a “data vacuum” and internal disagreements. The expected rate cut may be accompanied by vague language regarding the interest rate path for next year, possibly leaning hawkish. In addition to the anticipated rate cut, investors currently expect the Federal Reserve to implement two more 25 basis point cuts before the end of 2026, keeping the benchmark rate in the 3.00%-3.25% range. JPMorgan Chief U.S. Economist Michael Feroli stated that hawkish views emerging from regional Fed presidents could cause the 2026 rate outlook to remain consistent with September—despite the already low support for rate cuts this week, the threshold for further cuts has increased. Feroli said that the new interest rate forecast will “reflect unease about rate cuts,” and the policy statement may be adjusted to “suggest a lower likelihood of cuts at subsequent meetings,” with Powell emphasizing in the post-meeting press conference that “further rate cuts will only occur if there is a significant deterioration in the labor market.”