Analysis of Federal Reserve Rate Cut Expectations and Market-Related Situations
It is speculated that the Federal Reserve is likely to take rate-cutting measures next month. However, once Trump's related policies were introduced, market expectations for the Federal Reserve to cut rates by the end of 2025 were cut in half.
The current economic situation presents a rather complex scenario: economic data has shown some improvement, but inflation has not decreased accordingly. Meanwhile, the stock market has been making significant gains, continuously reaching new heights.
The existence of these conditions has made the Federal Reserve particularly cautious when considering rate cuts, reluctant to make drastic moves. Take Federal Reserve Chairman Powell's statement last week as an example; he clearly pointed out: "From an economic perspective, there are no signals indicating an urgent need for rate cuts."
From the economists' perspective, nearly 90% believe that the Federal Reserve should cut rates by 25 basis points in December. However, based on market pricing, the actual possibility of a rate cut in December is even less than 60%.
Although various data indicators suggest the possibility of a Federal Reserve rate cut, the market believes that the momentum of the U.S. economy is too strong and that inflation remains at a high level.
Therefore, considering various factors, it is highly likely that the Federal Reserve will not conduct large-scale rate cuts as we previously anticipated, as they need to closely monitor inflation conditions to prevent it from spiraling out of control.
It is important to know that in the face of a bull market, the challenges we face are not limited to the fluctuations of the market itself; more crucially, it is a test of our own mindset.
When we see our account funds fluctuate with market trends, it is essential to maintain a rational thought process to better respond to various market changes and make more reasonable investment decisions.