Fed megaphone: 97.1% chance of a 1-point cut in December! Next year, the pace of rate cuts may temporarily slow down

The Federal Reserve is expected to announce the December Intrerest Rate decision on the 19th of this week, with the market generally expecting a 1-point rate cut in December. However, Nick Timiraos, a reporter for The Wall Street Journal, known as the 'Fed megaphone', said that how Fed officials view the future direction of the Intrerest Rate may be more important than whether or not to cut rates. The Federal Reserve (Fed) is expected to announce the Intrerest Rate decision this Thursday (18th), with the market generally predicting a 1-point rate cut in December. According to the CME Fed Watch tool, the market expects a 97.1% probability of a 1-point rate cut in December, with only a 2.9% probability of no rate cut. In addition, if the Fed cuts rates by 1 point in December as expected, it will complete a consecutive three-month rate cut (September, November, and December) this year. However, Fed Watch also shows that the market expects only a 16.6% probability of a 1-point rate cut in January next year (to 4.00%-4.25%). Fed megaphone: The pace of rate cuts may temporarily slow next year. In response to this, Nick Timiraos, known as the 'Fed megaphone', wrote today that a 1-point rate cut this week is almost a foregone conclusion, but how Fed officials view the future direction of the Intrerest Rate may be more important than whether or not to cut rates at this FOMC meeting. The article mentioned that Jon Faust, who served as an adviser to Jerome Powell from 2018 to early this year, said: At present, there are reasons to support either a rate cut or holding steady. Fed officials' views on the future direction of the federal funds Intrerest Rate may be more important than any decision at the December meeting. In addition, although the Fed has indicated a recent slowdown in inflation, some Fed officials believe that the policies implemented by President Trump after taking office will reverse the two major factors that the Fed sees as contributing to cooling inflation: 'falling commodity prices' and 'slowing wage growth'. Furthermore, Fed officials are also concerned about the investment frenzy in the US stock market and BTC, which may stimulate consumer spending and further fuel inflation. In response, Nick Timiraos predicted that the pace of rate cuts may temporarily slow next year: One option this week is to cut rates by 25 basis points, and then use new economic forecasts to strongly indicate that the Central Bank is preparing to cut rates more slowly. Fed officials are concerned that 'excessive rate cuts' may pose risks. On the other hand, Timiraos' article also mentioned that there are two factions of officials within the Fed, one supporting rate cuts and the other opposing them. Among the Fed officials who oppose rate cuts, Fed Governor Bowman said in a speech earlier this month that if the rate cuts are too rapid, it could spark an investment frenzy, which could 'rekindle' an already unstable inflation rate. Furthermore, Fed official Lorie Logan also warned: Do not mistakenly believe that the 'normal' Intrerest Rate for the economy is far below the current level, leading to excessive rate cuts. The article continued, pointing out that the 'rate cut supporters', including Powell, also share concerns about the risk of excessive rate cuts, but given that the Fed has raised the Intrerest Rate to a relatively high level over the past two years, they believe that there is currently no risk of excessive rate cuts. Powell said last month: We are aware of the risks of excessive and too rapid rate cuts, and also aware of the risks of insufficient rate cuts. At present, it seems that we are in the position we need. Related reports: The reason for BTC's surge? The Central Bank of Japan is rumored not to raise rates in December! The yen plummeted to a 3-week low. BTC breakthrough in two years? The king of SPAC warns that 'Google quantum chips' can kill sha-256 in seconds; Adam Back curses nonsense. BTC surges past $106,600, analysts optimistic: Trump's inauguration could push it to $120,000. The Federal Reserve megaphone: 97.1% probability of a 1-point cut in December! The pace of rate cuts may temporarily slow next year. This article was first published on BlockTempo, the most influential blockchain news media in BlockTempo.