Fed officials are trying to keep the outlook for rate hikes alive, but the market generally believes that the next move will be a rate cut. However, the Fed's promise to cut rates may make it more difficult to deliver on that promise.

Apollo's Thorsten Slok pointed out in a report that the more dovish the Fed's stance, the looser the financial environment will be, which will make it more difficult for the Fed to cut rates. He called it the "Fed's reflexive paradox of rate cuts." Since the Federal Open Market Committee began talking about rate cuts in November, U.S. stocks have risen and the household sector has experienced unexpected gains. In addition, government spending has also provided a huge boost to the economy. Slok believes that these factors have made the Fed face greater challenges in cutting rates. Once the rate cut plan is mentioned, bond yields will immediately fall, which will have the effect of a quasi-rate cut, but the Fed does not want to cut rates in the next 3 to 6 months. This mismatch between market expectations and actual policies requires the Fed to be more cautious and prudent on the issue of rate cuts.

The Fed's promise to cut rates is indeed difficult to achieve, but it is also a challenge that the Fed needs to face and solve. We look forward to the Fed being able to find the best path to balance financial stability and economic growth.