October Interest Rate Meeting: Powell's "Gentle Knife"💥💥
Despite the Fed's expected rate cut and pause on balance sheet reduction, Powell's hawkish remarks caught the market off guard.
On one hand, the Fed cut rates by 25 basis points again and announced a pause on balance sheet reduction in December, which alleviated some current liquidity and economic pressure;
On the other hand, Powell's hawkish statements emphasized that a rate cut in December is not guaranteed, and there are increasingly more wait-and-see voices within the Fed, making the future rate cut path more "enigmatic."
In terms of asset performance, market expectations for a December rate cut have significantly adjusted (from about 90% down to around 60%), gold and U.S. stocks have seen short-term sell-offs, and U.S. Treasury yields have risen.
Affected by Powell's conference speech, last night led to negative spikes; the short-term market will gradually digest the negative news, but the overall direction has not changed, and the market remains predominantly bullish.
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