Di Yi Cai Jing·2025-10-29 23:51Core Viewpoint - The Federal Reserve is likely to continue lowering interest rates in December, with current market pricing indicating a 60% probability of a rate cut, influenced by upcoming employment and inflation data [1] Employment Data - Initial jobless claims and job vacancy data suggest a weak labor market, but recent ADP weekly employment data indicates stabilization since October, aligning with the continuous recovery in NFIB hiring intentions [1] Inflation Data - The September Consumer Price Index (CPI) fell short of expectations, with inflation expectations remaining stable, suggesting a moderate inflation environment [1] Future Projections - Although the downside risk for the labor market may decrease, employment recovery is expected to be slow, and with moderate inflation, a rate cut in December remains the baseline scenario [1] - If the labor market improves by 2026 and inflation exceeds the Fed's target, the market's current pricing of nearly three rate cuts in 2026 may be difficult to realize [1] Market Liquidity - Given the potential stabilization in the labor market, continued rate cuts by the Fed, and the end of balance sheet reduction, overall dollar liquidity is expected to remain accommodative, supporting U.S. asset prices [1]