#十二月降息预测

According to the latest market expectations and institutional analysis, the probability of the Federal Reserve cutting interest rates in December is very high, mainly based on the recent weakness in the labor market and the dovish signals released by several key Federal Reserve officials.

The table below整理了关于12月降息预测的核心信息.

Market implied probability: The probability of a 25 basis point rate cut in December is **86.4%** according to the CME "FedWatch" tool as of November 29, (.

Main institutional views: **Goldman Sachs** & **J.P. Morgan**: Predict a 25 basis point rate cut in December - **J.P. Morgan** further predicts another 25 basis point cut in January next year, based on interpretations of Federal Reserve officials' remarks and economic data.

Federal Reserve Internal Tendencies: The "Three Giants" of the leadership (Powell, Williams, Waller) all tend to support interest rate cuts | Public statements from New York Fed President Williams and others.

) 📈 The main reason for the rising expectations of interest rate cuts

Recently, the market's expectations for the Federal Reserve to cut interest rates in December have significantly heated up, primarily based on the following points:

- **Job Market Cooling**: The latest data shows that the U.S. unemployment rate rose to 4.4% in September, reaching a nearly four-year high. The Federal Reserve's November "Beige Book" also noted that the U.S. job market remains weak. This has prompted the Federal Reserve to shift its policy focus to support the labor market.

- **Core Officials "Leak"**: As a close ally of Federal Reserve Chairman Jerome Powell, **New York Fed President John Williams**'s remarks are a strong policy signal. He openly stated that as the labor market cools, there is "room for further rate cuts in the short term." This is interpreted by the market as a consensus among the Federal Reserve leadership regarding a rate cut in December.

- **Inflationary pressures ease**: Although the absolute value of inflation remains high, Federal Reserve officials believe that **upside risks have diminished**. Vice Chairman Jefferson noted that "upward pressure on inflation has eased slightly," providing more room for rate cuts.

⚠️ Risks and Discrepancies to Be Aware Of

Although the probability is high, this interest rate cut is not a "done deal," and there are still several uncertainties you need to be aware of:

- **There are divisions within the Federal Reserve**: Not all officials support an immediate rate cut. For instance, Chicago Fed President Goolsbee expressed feeling "uneasy" about a potential rate cut in December, while Cleveland Fed President Mester has clearly opposed any cut. This division suggests that the final decision discussions may be quite intense.

- **The Challenge of Data Gaps**: Due to the unprecedented length of the U.S. government shutdown, the release of key economic data was interrupted. This means that the Federal Reserve will be in a certain degree of "**data vacuum**" when making decisions at the December meeting, which increases the difficulty of decision-making.

- **Belongs to "Insurance Rate Cut"**: Some analysts believe that if there is a rate cut in December, it is more likely to be an "**Insurance Rate Cut**." This means it is a preventive measure taken to guard against the risks of economic downturn, and does not indicate the beginning of a long-term, aggressive rate-cutting cycle.

### 💎 Summary

In summary, the Federal Reserve's expectation to cut interest rates by 25 basis points in December is **the mainstream expectation of the current market and analytical institutions**, with a high probability. The two core logics dominating this expectation are "weak employment data" and "hawkish signals from the Federal Reserve leadership."

However, due to internal disagreements and a lack of up-to-date data support, it is recommended that you closely monitor the **policy statement following the Federal Reserve's interest rate meeting on December 10** and **Chairman Powell's press conference** to obtain the most accurate policy direction.