The Fed has now entered garbage time, or a transition period of the game.

With Hassett surfacing the surface, Powell is now in a state of caretaking, in this context, he does not dare to be too aggressive, such as cutting interest rates by 50bp, and will not stop cutting interest rates directly, and a 25bp cut is the best

The current situation is very interesting, the nominees from both parties in the council are evenly matched.
It is precisely because he is at such an awkward political juncture that Powell can only hold the shield of data, but it leads to a big problem, the shelf life of this meeting is actually very short.

Why do you say that? Due to the impact of the previous government shutdown, there is little data in hand and the distortion lags, and the economic forecasts and dot plots made on the basis of this data are actually not highly credible.

The Fed is driving into a bunch of blurry rearview mirrors tonight, and new non-farm payrolls, CPI and PCE data will be released next week, and once those new data come out, all forecasts tonight may be invalidated in an instant.

Therefore, the market will not take tonight's forecast too seriously, and this meeting is more like a necessary transition than a long-term guide.

Understanding the above two layers of logic, political constraints, coupled with ambiguous data, we can naturally deduce tomorrow's result: this is a hawkish interest rate cut.

In order to give the market an explanation and to deal with employment that is indeed deteriorating, a 25 basis point rate cut is inevitable, but in order to maintain the Fed's so-called independence and leave a way for the future, Powell must be particularly tough on his lips

In fact, in this meeting, extreme differences of opinion will be the biggest signal.