On the eve of the interest rate meeting, hawkish interest rate cuts were overwhelming, and the liquidity gate and the year-end test of the crypto market were held; Powell ushered in a back-to-back battle, with half of his colleagues opposing interest rate cuts

In the early morning of December 11, Beijing time, the Federal Reserve will announce its last interest rate decision of the year. The market has almost reached a consensus that the federal funds target range is likely to be lowered by another 25 basis points, from 3.75%–4.00% to 3.50%–3.75%, completing the third rate cut since September. Nick Timiraos, the "Fed mouthpiece", wrote: "Fed officials are about to hold their last interest rate meeting of the year, and as many as half of the members in the conference room may not support interest rate cuts. But the final decision remains in the hands of Chairman Powell, who seems ready to push for a rate cut despite rare opposition. ”

The core focus of this rate cut is actually the press conference after the interest rate decision is announced. You know, Powell has made it clear before that he is not in a hurry to cut interest rates; This time it was "pushed" to cut interest rates, which is somewhat passive. Therefore, at the press conference, he will most likely take a hawkish stance to make amends and give the market a preventive shot - don't expect to continue to cut interest rates later.
In fact, you can understand it by settling the accounts. After this cut, the interest rate will return to the neutral level of 3.5%, which is similar to the historical normal, and there is basically no suppressive effect. But the problem is that inflation is still biting 3% and refusing to let go, which is still far from the Fed's 2% target line, and the economic data is not as crotch-pulling as imagined. According to this logic, there is really no reason for the Fed to continue to release water - this is exactly the rhetoric that Powell has been talking about.

Overall, Powell's wave may be "both wanting and wanting". The 25bp rate cut has given the market sweetness, but it has repeatedly emphasized inflation risks and refused to give a clear path to cut interest rates, after all, the differences within the Fed are already there. The market was waiting for clear policy guidance, but it turned out to be a bunch of ambiguous words. Although the shadow chairman was dovish, it was Powell who made the final decision. If there is no accurate policy guidance, the market will most likely go back and forth next.

In fact, the core of tonight's Fed interest rate decision is not whether to cut interest rates, but where market sentiment will be directed tomorrow. As Nick said, there is a possibility of a "hawkish rate cut" tonight, which is tantamount to a shock for the current fragile market. If Powell releases tight rhetoric, the market may be instantly unbalanced. Of course, all judgments need to be based on the announcement of the results. The deduction before the data comes out is just a deduction after all, and the key is to look at Powell's speech tonight, his attitude, words, and rhythm will become the anchor point of the market's tomorrow direction.

Rather than waiting for a rate cut, everyone is more concerned about whether this will be a hawkish interest rate cut in the standard sense!