--- title: "The Federal Reserve's rate cut in December is in doubt, and Wall Street may witness more \"moments of panic\"!" type: "News" locale: "zh-CN" url: "https://longbridge.com/zh-CN/news/263516412.md" description: "The Federal Reserve expressed uncertainty about the prospect of a rate cut in December during its latest meeting. Chairman Powell's remarks surprised the market, leading to a decline in U.S. stocks and a sell-off in bonds. Although the benchmark interest rate was lowered by 25 basis points to a range of 3.75%-4%, the market had already anticipated this. The government shutdown has resulted in a lack of key economic data, increasing uncertainty in policy-making. Analysts point out that market expectations for a rate cut may fluctuate in the next six weeks, but investors still hold hope for a rate cut in December" datetime: "2025-10-30T12:11:21.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/263516412.md) - [en](https://longbridge.com/en/news/263516412.md) - [zh-HK](https://longbridge.com/zh-HK/news/263516412.md) --- > 支持的语言: [English](https://longbridge.com/en/news/263516412.md) | [繁體中文](https://longbridge.com/zh-HK/news/263516412.md) # The Federal Reserve's rate cut in December is in doubt, and Wall Street may witness more "moments of panic"! Despite investors previously hoping for more monetary policy easing, the Federal Reserve's meeting that concluded on Wednesday Eastern Time showed that the subsequent interest rate cut path is becoming increasingly uncertain amid a lack of data, persistent inflation, and internal disagreements within the central bank. Federal Reserve Chairman Jerome Powell's remarks surprised the market as he questioned the prospects of a rate cut at the next meeting in December, stating that such a move is "not a foregone conclusion," even though the market had almost taken it for granted. Following his speech, U.S. stocks erased earlier gains, and bonds were sold off. The Federal Reserve lowered the benchmark interest rate by 25 basis points to a range of 3.75% to 4%, down 150 basis points from last year's peak, and halted its balance sheet reduction plan. Although these measures are favorable for the market, they had already been anticipated and reflected in asset prices. ## Data Shortages Disrupt Decision-Making Process The U.S. government shutdown has resulted in the unavailability of labor market and other economic data that the Federal Reserve traditionally relies on, casting a shadow over policymakers' decisions and adding more uncertainty for investors. John Velis, a macro strategist at Bank of NY Mellon, stated, "The lack of data will make it difficult for us to predict the Fed's policy direction six weeks from now." He pointed out that from now until the meeting on December 9-10, **"the market's expectations for a rate cut in December may experience significant fluctuations, and I believe this could trigger some market volatility."** A weakening labor market had prompted the Federal Reserve to cut rates for the first time this year in September 2025, while the latest data shows that inflation remains above the Fed's 2% target. The latest rate cut decision faced opposition from two officials: Fed Governor Michelle Bowman again called for a more significant reduction in borrowing costs, while Kansas City Fed President Esther George argued that given the persistently high inflation, there should be no rate cuts at all. ## Investors Still Hold Hopes for December Rate Cut Jim Caron, Chief Investment Officer of the Portfolio Solutions Group at Morgan Stanley Investment Management, stated that Powell's uncertainty regarding a December rate cut may **lead the market to have more doubts about the policy direction for next year.** Caron said, "After hearing this, the market will think, wait... if we are still debating whether to cut rates again, how certain can you be that rates will drop to 3% by 2026?" However, he added that **the slowdown in the labor market may still provide a reasonable basis for a December rate cut: "I don't think this will change the overall trajectory."** Investors still seem to hope for the Federal Reserve to ease monetary policy at the next policy meeting. According to data from the London Stock Exchange Group (LSEG), U.S. interest rate futures pricing shows that **the probability of a 25 basis point cut in December is 67.9%, down from 85% before Powell's remarks. Traders also continue to expect that rates will ultimately drop to around 3% by the end of next year, consistent with pre-meeting expectations.** Michael Arone, Chief Investment Strategist at State Street Global Advisors, also stated that he still expects the Federal Reserve to cut interest rates in December. Arone said, "We will ultimately get some data, and I expect that data will show the labor market continuing to weaken." However, some institutions hold a more skeptical attitude. Bespoke Investment Group stated in a report, "We believe the hawkish stance of this meeting far exceeds market pricing." The institution also pointed out that Powell repeatedly emphasized the intense debate within the Federal Reserve, "which provides justification for further lowering the probability of a rate cut in December." **Nomura Securities quickly canceled its expectation for another rate cut by the Federal Reserve in December after the Fed announced its October interest rate decision and Powell's press conference.** The institution expects the Federal Reserve to cut rates by 25 basis points in March, June, and September of next year. ## Positive Outlook Significantly Diminished Expectations for more accommodative policies had previously driven the stock market up, with the S&P 500 index rising for four consecutive trading days before Wednesday's meeting. Matt Rowe, Senior Portfolio Manager at Man Group, stated, "Given what just happened, **the current stock market valuations look higher now.**" Meanwhile, **some market participants have downplayed the impact of the Federal Reserve's halt in balance sheet reduction on risk assets.** Amar Reganti, Fixed Income Strategist at Hartford Funds, stated that the end of quantitative tightening will only have a slight positive impact on the overall market, partly because the process of balance sheet reduction has been very gradual. Reganti noted that if the Federal Reserve takes a more dovish stance on interest rate prospects, combined with the news of halting balance sheet reduction, "it would certainly have fostered a stronger risk appetite," "but that is not the case." ### 相关股票 - [Bank of NY Mellon (BK.US)](https://longbridge.com/zh-CN/quote/BK.US.md) - [State Street (STT.US)](https://longbridge.com/zh-CN/quote/STT.US.md) ## 相关资讯与研究 - [Beyond T-bills: OpenEden introduces tokenized high-yield corporate bond](https://longbridge.com/zh-CN/news/281500484.md) - [State Street Group Ceases to Be Substantial Holder in Greatland Resources](https://longbridge.com/zh-CN/news/280958438.md) - [What to Expect From U.S. Bancorp’s Q1 2026 Earnings Report](https://longbridge.com/zh-CN/news/281332824.md) - [Nato's Rutte to meet with Trump next week - WSJ](https://longbridge.com/zh-CN/news/281426319.md) - [Banco Santander Updates Market on Total Voting Rights](https://longbridge.com/zh-CN/news/281231726.md)