Everyone is waiting for the Fed rate cut on Thursday. Everyone knows in their hearts that a 25 basis point rate cut by #美联储重启降息步伐 is almost a foregone conclusion. Instead, the real focus is what happens after the rate cut by #鲍威尔讲话 —that’s what will shape the trend going forward!

Will he hint that “this is the last cut,” or will he leave some hope for the market? Every word he uses will be dissected and magnified by the market.

After the 25 basis point rate cut in October, Powell warned of the need to guard against an inflation rebound and emphasized that the December rate cut was “by no means a done deal”—since March 2021, the inflation rate has remained above the Fed’s 2% target. Recent weak labor market data and PCE data showing slowing inflation are steadily reinforcing expectations of a rate cut. However, last week’s initial US jobless claims hit a more than three-year low, alleviating concerns about a rapidly deteriorating labor market, but the diverging data have made policy decisions even more difficult for the Fed.

Many external factors are further complicating decision-making: fiscal concerns from large-scale government tax cuts and spending bills, tariff uncertainties, doubts about the Fed’s independence, and a 43-day government shutdown that has delayed the release of key economic data, all adding to the uncertainty of the policy path.

In this situation, market movements will be completely driven by news. If Powell’s comments are “dovish” (hinting at more cuts), then risk assets may continue to rally.

The biggest fear is a “black swan”: if there’s no rate cut, there’s no need for further analysis—just fasten your seatbelt.

There are still two days until the rate cut. In these two days, you have to eat and prepare to seize the big opportunity on the day of the rate cut. If you win, you celebrate; if you lose, there’s not much to lose.