Golden Ten Data Compilation: Key Points of the Federal Reserve Statement and Powell's Press Conference

FOMC statement: 1. Statement Overview: Cut interest rates by 25 basis points to 3.50% -3.75%, marking the third consecutive meeting of interest rate cuts. Milan supports a 50 basis point rate cut, while Goolsby and Schmid support keeping interest rates unchanged. 2. Interest rate outlook: We will consider the magnitude and timing of further interest rate adjustments. The median in the dot plot is exactly the same as September, and it is expected to cut interest rates once in the next two years. 3. Inflation outlook: Inflation has increased compared to the beginning of the year and remains relatively high, consistent with previous statements. Lower next year's inflation expectations in SEP. 4. Economic outlook: Economic activity has been expanding at a moderate pace, and the uncertainty of the outlook remains high, consistent with previous statements. Raise the GDP growth rate for the next three years across the board. 5. Job market: The description of a "low" unemployment rate has been removed, and it is believed that the downward risk in employment has increased in recent months. The unemployment rate forecast for next year remains unchanged at 4.4%. 6. Reserve bond purchases: Treasury bonds will be purchased starting from December 12th, and $40 billion worth of Treasury bonds will be purchased over the next 30 days. The operational restrictions on permanent overnight repo operations have been lifted. Powell's press conference: 1. Interest rate outlook: You can wait and observe how the economy develops. Currently at the upper end of the neutral level range. Currently, no one expects a rate hike as their basic expectation. Long term interest rates may rise due to expectations of accelerated economic growth. 2. Inflation outlook: Inflation risk tends to rise. The peak inflation rate may be a few percentage points higher or lower than the current level. The current inflation overshoot is mainly caused by tariffs. If tariffs are lifted, the inflation rate will be at a low level in the 2% range. The impact of tariffs is likely to be one-time. 3. Economic outlook: We do not believe that the economy is overheated, and the benchmark outlook for next year will be steady growth. We can wait and observe the development situation. 4. Employment prospects: There are downside risks in the labor market. The employment growth in recent months has been exaggerated by 60000 jobs. The unemployment rate may rise by a maximum of 0.1% -0.2%. 5. Bond purchase situation: The purchase of short-term treasury bonds is only used for reserve management, and the scale of bond purchases may remain high in the coming months and gradually decrease thereafter. 6. Latest expectation: As of press time, the futures market expects the Federal Reserve to cut interest rates by a cumulative 55 basis points next year, a slight increase from before the meeting. The probability of a 25 basis point rate cut in January next year is 24.4%. 7. Market reaction: During the period from the release of the Federal Reserve statement to Powell's speech, gold and silver first rose, then fell, and then rose again. Silver, on the other hand, hit a historical high, while US bond yields fell by about 4BP. The overall US dollar weakened, and non US currency pairs strengthened. US stocks tended to rise, and the Dow Jones Industrial Average rose by more than 1%. Trump criticized Powell after the meeting, saying that the rate cut could be even greater.