As the December Fed meeting approaches, Fed officials have been increasingly vocal in the near future。Overall, encouraged by lower inflation and slower data, if the FOMC committee stays on hold at its December policy meeting, they say they will be happy with policy。

Fed officials put pigeons on December interest rates unchanged probability as high as 95%

On Nov. 29, Fed Governor Christopher Waller said the Fed could decide to cut its benchmark interest rate as early as next spring if inflation continues to fall steadily.。It's worth noting that Waller has always been seen as a hawkish figure within the Fed, and in the past, he has typically favored higher interest rates to fight inflation rather than lower interest rates to boost job growth。

Waller also said the Fed's current interest rate policy is a good way to slow economic growth and bring inflation back to its 2 percent target。Waller's rare release of dovish information is seen as a sign that the Fed may have ended rate hikes。

On the same day, Chicago Fed President Austan Goolsbee also made dovish remarks.。In an interview, Goolsbee expressed concern about the risks of keeping interest rates high for a long time。He believes that monetary policy should be relaxed before inflation reaches its target to prevent excessive effects.。He likened the process to cooking a turkey, which should be taken out of the oven before it is fully cooked and used to make it ripe.。

According to Goolsbee, "Once you believe that you are on the path to achieving your inflation target, then you need to reduce the restrictive measures taken.。"

Since the Fed launched its current rate hike cycle in March 2022, the cumulative rate hike has been 525 basis points。In September, the Fed decided to keep the target range for the federal funds rate at 5.25% -5.5% unchanged, remaining at a 22-year high, while the SEP bitmap released shows another rate hike this year or。

However, the market expects Fed officials to keep interest rates steady again at their last meeting of the year as inflation continues to cool。As of press time, according to the relevant interest rate futures, the Fed kept interest rates at 5 in December..25% -5.The probability of the 50% interval being constant is 95.4%, the probability of a 25 basis point rate hike is only 4.6%。The probability of keeping interest rates unchanged by February next year is 87.9%, with a cumulative probability of a 25 basis point cut of 7.9%, and the probability of a cumulative rate hike of 25 basis points is 4.2%。

Fed and markets diverge, Powell is expected to remain cautious.

On Friday, Federal Reserve Chairman Jerome Powell will speak at the Spelman Institute in Atlanta.。Markets expect Powell to remain cautious, continuing to reiterate that it is "too early" to declare a victory against inflation.。The commentary said that the Fed's internal vigilance for an inflation rebound could keep the benchmark interest rate lying high in 2024, well above market expectations of four rate cuts of 25 basis points each.。

Earlier this month, Powell had expressed caution about inflation。He said that while U.S. inflation has declined over the past year, it is still well above the 2 percent target。He believes that if further policy tightening is appropriate, the Fed will not hesitate to do so。However, the Fed will continue to be cautious, both against the risk of being misled by months of good data and against the risk of excessive tightening。

According to the median Fed rate forecast released in September, officials expect the Fed's rate to fall to 5-5 by the end of 2024..25% level - only 25 basis points less than current。

In contrast to the Fed's cautious approach, the market remains fully optimistic about the bank's rate cut next year。Market data suggest that the probability of a 25 basis point rate cut by the Fed in March next year is approaching 50%, and that the Fed's rate cut in May next year has been fully priced in。By the end of next year, the Fed is expected to cut interest rates by 1%。

Other than that, some of Wall Street's predictions are even bolder。Deutsche Bank, which expects a mild recession next year, reiterated its view this week that the Fed could cut rates starting in June and by a total of 175 basis points by the end of the year.。Hedge fund bigwig, Pershing Square Manager Ackman (Bill Ackman) also said that the central bank will cut interest rates as early as the first quarter of 2024。

In response to the disagreement between the market and the Fed, Yelena Shulyatyeva, senior U.S. economist at BNP Paribas, said: "In light of Waller's recent comments, expectations for Chairman Powell's opinion on a rate cut have risen significantly.。She continued: "However, in the current situation, Powell is not expected to firmly confirm the new dovish tone."。After all, the Fed's goal isn't necessarily a soft landing; it's getting inflation back to its 2% target。"

The Fed's last meeting of the year will be held on December 12-13.。Previously, known as the "Fed mouthpiece," there is a "new Fed News Agency" said the financial reporter Timiros (Nick Timiraos) has written that the Fed Chairman Powell did not put forward the reason to raise interest rates, but will not close the door to continue to raise interest rates。