Urgent Notice: Last night, the market significantly increased bets on interest rate cuts: the probability of a 50 basis point cut surged from 0 to 12%.

The Federal Reserve has issued an urgent statement. Chicago Fed President Goolsbee stated that no decision has been made regarding the actions to be taken at this month’s meeting, and he hopes to see next week’s inflation data before making a decision. The recent inflation report showed a rise in inflation in the services sector, and he wants to ensure this is just a temporary phenomenon and not a more ominous indicator.

First, the timing is too sensitive. The statement came 5 hours after the non-farm payroll report and at the last moment before the quiet period. The Fed could have chosen to remain silent, but they urgently connected with the media to indicate their concern that the market's "overinterpretation" has gotten out of control.

Second, there are implications in the statements. The market is considering “whether there will be a significant rate cut,” while the Fed is contemplating “whether to cut rates.” Goolsbee acknowledged, “Service sector inflation is on the rise.” This statement is key. If inflation does not decrease and employment worsens, the Fed will not hastily pursue aggressive rate cuts. The Fed's threshold is to confirm that inflation is not an issue, rather than being driven by a single data point.

Third, this is the Fed's last statement before its quiet period and seems to represent their final stance. The Fed could choose silence but still opted to cool the market, not wanting to let financial conditions loosen prematurely to the point of losing control.

The current situation resembles a repeat of 2019: the market is desperately betting on “preemptive interest rate cuts,” but the Fed will wait for data confirmation before taking action— the divergence in expectations between the two has become the biggest risk point. Ultimately, a significant shock will be needed to narrow the gap between the two, with risks and opportunities closing in. #非农就业数据来袭 #美联储降息预期 $BTC $ETH