10月美联储议息会议点评：10月FOMC：降息路径反转？

Report Summary 1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - The benchmark scenario is still a 25bp interest rate cut in December and about 3 more cuts next year. The sudden drop in interest rate cut expectations caused by Powell's speech may be temporary, and the expectations are expected to gradually recover [4][5]. - The impact of Powell's "hawkish speech" is expected to be temporary. Subsequently, the market may return to the trajectory of the interest rate cut cycle. Treasury yields will continue to decline, the dollar will weaken, and the gold price is expected to recover after a correction. The interest rate cut cycle will be beneficial to emerging market stocks and bonds. In a low - probability scenario, if the Fed pauses interest rate cuts in December and has difficulty advancing cuts in 2026, Treasury yields and the dollar may remain high, the gold price will be continuously suppressed, US stocks will face pressure, and emerging market assets will also face greater pressure [6][27]. 3. Summary by Related Catalogs 3.1 Meeting Statement Continues to Be Dovish, End Quantitative Tightening in December - On October 29, the Fed cut interest rates by 25bp as expected, lowering the federal funds target rate to the 3.75% - 4% range. There were 2 dissenting votes, indicating an escalation of internal game within the Fed [1][7]. - The economic description in the meeting statement was similar to that in September, maintaining a dovish tone. Employment growth has slowed, and the risk of employment decline has increased in recent months. Inflation is still slightly high [1][7]. - The Fed will end quantitative tightening (QT) on December 1. Since the start of QT in June 2022, the Fed's total assets have decreased from $9 trillion to $6.6 trillion. Currently, the bank reserve balance is $2.93 trillion. Excessive withdrawal of reserves may lead to a liquidity crisis, and there have been recent signs of tightened liquidity and pressure on the money market [1][7][8]. 3.2 Powell Is Hawkish, Emphasizes December Interest Rate Cut Is Uncertain - Different from the mild meeting statement, Powell showed a hawkish stance at the press conference, emphasizing that a December interest rate cut is far from certain. The Fed has not made a decision on the December meeting, and there are serious differences among committee members. More and more officials hope to postpone the interest rate cut [2][15]. - Powell believes that the economy is basically healthy, and inflation is still slightly high. He also comforted the market about concerns over the AI bubble, saying that AI is different from the 1990s bubble as companies are already profitable [2][15]. - Regarding the Fed's balance sheet, Powell's stance is dovish. He pointed out that there is obvious pressure in the money market, and quantitative tightening needs to be stopped immediately. Eventually, "we will increase reserves at some point" [2][15]. 3.3 Has the Interest Rate Cut Path Reversed? Currently, It's Uncertain - Market expectations for interest rate cuts in December and 2026 have significantly decreased. After Powell's press conference, the market - expected probability of a December interest rate cut dropped to 67.8% (90.5% before this FOMC), and the market expects only 1 interest rate cut in 2026 (3 cuts were expected last weekend) [3][18]. - Treasury yields rose significantly, the dollar strengthened, US stocks dived during the session but the Nasdaq closed higher due to AI, and gold turned down during the session [3][18]. - The interest rate cut path may not have reversed. Powell emphasized that the December interest rate cut is undecided, mainly to leave room for flexible operations. Leading indicators of CPI components such as used - car inflation, housing inflation, and wage - related service inflation are all declining [4][19].