Next week's most important agenda ⚠️

At 3 AM Beijing time on December 11, the Federal Reserve will announce the December interest rate decision, and half an hour later, Powell will hold a press conference.

The market expects an 84% probability that the FOMC will cut interest rates by 25 basis points for the third time, achieving a total of 75 basis points of easing this year; at the same time, the maximum predicted probability for the Federal Reserve to cut by 25 basis points on the market polymarket has reached 93%.

Although the government shutdown has led to some data being missing, the September PCE shows a slowdown in consumption and moderate inflation, while JOLTS job openings have fallen, supporting the expectation of a rate cut. However, there is a rare divergence within the Federal Reserve: at least 5 of the 12 voting members prefer to pause the rate cuts, while a few others advocate for more aggressive easing. If there are more than 3 dissenting votes this time, it will be the first time since 2019 and only the ninth time since 1990.

Currently, the market is highly focused on three major points: whether Powell can promote the rate cut with minimal dissenting votes, demonstrating leadership; whether his statements at the press conference are dovish, especially against the backdrop of weak ADP employment and a soft Beige Book; the latest dot plot and economic forecasts — if the GDP growth rate for 2025-2026 is raised but only suggests one rate cut next year, it may be seen as a hawkish signal.

This decision will not only determine the year-end trend of risk assets but will also provide key guidance for the interest rate cut path in 2026 and global central bank policies. Against the backdrop of the Trump era potentially ending Powell's term early, the degree of divergence in this meeting, the adjustment of the dot plot, and Powell's tone may become the last important policy signal during his tenure.