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2025-10-30 08:42:21
[CITIC Securities: FOMC Divergence Widens, Powell Downplays December Rate Cut Expectations] A CITIC Securities research report points out that the Fed's 25bps rate cut at its October 2025 meeting was in line with market expectations. Powell's assessment of the economic situation was similar to that of September, and he noted the significant divergence within the FOMC regarding whether to continue cutting rates in December, stating that a December rate cut is not a "sure thing." However, we believe that not cutting rates in December requires the US government to return to normal operations and release economic data that does not support further rate cuts, which is a higher threshold than continuing rate cuts. Furthermore, we believe that among the current 12 voting members for 2025, the number supporting a December rate cut still exceeds the number of those supporting it, and we expect December to be a "close call" rate cut. We maintain our previous view that the Fed will cut rates again by 25bps at its next meeting. After Powell downplayed rate cut expectations, the dollar and US Treasury yields rose, while US stocks and gold suffered some setbacks. We expect the market to continue trading on this shift in the short term, with the expectation of a rate cut diminishing.
