Nomura's recent move is quite interesting - they directly retracted their December Fed rate cut prediction and instead stated they would maintain the status quo. It's worth noting that they had previously firmly predicted a 25 basis point cut.

Why the sudden change of heart? There are three reasons backing it up. First, private sector data shows that the job market is not as bad as imagined, at least it can still hold up; second, Powell's remarks in October were quite firm, "It's not yet time to nail down rate cuts," this attitude is already very clear; and most importantly, the government shutdown has made it impossible to release official data, is it likely for the Fed to take action at this time? Not really.

This matter has quite an impact. Trump is probably going to be furious; high interest rates are stifling economic growth, and he will definitely fire back at the Fed. The market's reaction is even more direct — the probability of a December rate cut shown by federal funds futures has plummeted from 91% to 62%, which is quite a temperature difference. In the short term, risk assets are likely to be under pressure.

To put it simply, at this critical juncture in an election year, the Fed is walking a tightrope between inflation, data fog, and political pressure. Temporarily holding steady is arguably the safest "risk hedging" strategy—after all, no one wants to step on a landmine during such high uncertainty.