Regarding the interest rate decision early tomorrow morning, it seems likely that a 25 basis point rate cut is probable. The core points of interest are:
1. The dot plot showing the pace of rate cuts for next year. The September dot plot expected four rate cuts in 2025, while Bloomberg's statistics indicate that the market generally expects three more cuts next year. If the dot plot tomorrow morning still shows three cuts, it should be positive for the market. If it shows fewer than three, concerns are likely to arise.
2. Furthermore, it’s about the attitude displayed by Powell at the press conference. Is he signaling a strong next pause on rate cuts, or is he still maintaining a balanced approach, stating that ultimately it will depend on the data? The former would have a market impact, while the latter would likely lead the market to think that if it depends on data, they might as well wait until January to see how December's inflation and employment data turn out before making any decisions.
