Core Viewpoint - The Federal Reserve announced a 25 basis point cut in the federal funds rate target range to 3.75% to 4.00%, but Chairman Powell's comments weakened market confidence in a December rate cut, leading to a rise in U.S. Treasury yields [1][2]. Summary by Sections Federal Reserve Decision - The Federal Open Market Committee (FOMC) decided to lower the federal funds rate target range by 25 basis points, marking the second cut since September 17 [1]. - The FOMC noted that economic activity is expanding at a moderate pace, with employment growth slowing and a slight increase in the unemployment rate, while inflation remains high [1]. Diverging Opinions within the Fed - There are significant divisions within the Federal Reserve, with some members concerned that premature or excessive rate cuts could reignite inflation, while others argue for more aggressive easing to prevent deeper economic recession [2]. - Powell indicated that further rate cuts in December are not guaranteed, emphasizing the uncertainty due to a lack of government data during the shutdown [2]. Market Reactions - Following Powell's statements, U.S. Treasury yields rose significantly, with the 10-year yield increasing by 10.01 basis points to 4.0757% and the 2-year yield rising by 10.82 basis points to 3.5980% [2]. - The probability of a 25 basis point cut in December has dropped from over 90% to below 70% according to CME FedWatch [4]. Asset and Balance Sheet Management - The FOMC announced the end of balance sheet reduction operations starting December 1, which had involved monthly reductions of $50 billion in U.S. Treasuries and $35 billion in mortgage-backed securities [4]. - The Fed's balance sheet has decreased from nearly $9 trillion to approximately $7.2 trillion since the start of the balance sheet reduction in 2022, which is expected to alleviate liquidity pressures in the interbank market [4].
10月降息恐为年内最后一次 美债收益率上涨逾10BP
Xin Hua Cai Jing·2025-10-30 00:59