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[Powell's Latency: Rate Cuts Ineffective for Employment, December Pause Signal Flashed] ⑴ After the Federal Reserve cut interest rates by 25 basis points on Wednesday, Chairman Powell stated at a press conference that another cut in December was "far from certain," and unusually admitted that "policy may be close to neutral." The cumulative easing of 150 basis points has narrowed the room for future action. ⑵ Powell listed four major obstacles: "serious disagreements" among policymakers, a sharp drop in data visibility due to the government shutdown, inflation still above the target, and the unpredictable pace of the labor market slowdown. This caused the implied probability of another rate cut in December in the swap market to plummet from 74% to 48%. ⑶ He further proposed a "supply-side" argument, pointing out that the main reason for rising unemployment is a decrease in the labor force rather than a cooling demand. Tightening immigration, increased deportations, and the exit of teenagers and the elderly from the labor force have combined to push the unemployment rate to a four-year high of 4.3% in August. Traditional rate cuts to stimulate demand are "like pushing a rope." (4) Institutional tracking shows that the US stock market boom has led to the top 10% of asset holders contributing about half of consumption. Retail sales and business investment remain robust, exhibiting a "K-shaped" divergence: overheated assets and weak incomes. Further interest rate cuts could further inflate valuations, exacerbating the wealth gap. (5) Technically, the 2-year US Treasury yield rebounded 8 basis points at the end of Wednesday's trading, and the US dollar broke through 104.5. Quantitative models show that if the core PCE month-on-month increase is higher than 0.3% next week, the 10% chance of pausing betting in December will surge to 70%. Short sellers need to be wary of another reversal in interest rate expectations.