Ge Long Hui·2025-10-30 05:58Core Viewpoint - The U.S. government shutdown and the resulting data release "fog," combined with the realities of economic and inflation trends, contribute to the divergence in the Federal Reserve's monetary policy path, increasing uncertainty regarding future interest rate cuts [1][2][5]. Group 1: Federal Reserve's Rate Decision - The Federal Reserve lowered interest rates by 25 basis points (BP) as expected, but there was significant internal disagreement, with two members advocating for different stances on the rate cut [2][5]. - Powell's comments introduced greater uncertainty regarding future rate cuts, indicating that the path of monetary policy is becoming more divided [2][5]. - The Fed will stop balance sheet reduction on December 1 to alleviate tightening liquidity in the money market [6]. Group 2: Economic Outlook - The Fed expressed a more optimistic view of the economy, suggesting that the current data indicates moderate expansion [6]. - Confidence in controlling inflation has increased, with recent CPI data showing inflation pressures lower than expected [6]. Group 3: Employment and Market Dynamics - Employment pressures are expected to continue, with the logic for rate cuts being that downward pressure on employment outweighs upward pressure on inflation [3][7]. - The ongoing government shutdown has created a "fog" around employment data, complicating the Fed's ability to assess the economic situation accurately [3][7]. Group 4: Asset Price Expectations - It is anticipated that major asset prices will continue to reflect the logic of a preventive rate cut cycle, with U.S. Treasury yields expected to decline further but at a slower pace [8]. - U.S. equities are expected to remain supported, particularly in technology and interest-sensitive sectors like real estate and banking [9]. - The U.S. dollar index is projected to experience fluctuations but trend upwards as economic conditions stabilize [9]. Group 5: Gold Market Outlook - Gold prices may experience short-term fluctuations but are expected to maintain a long-term bullish trend due to ongoing geopolitical tensions and the narrative of de-dollarization [10].