What will the Federal Reserve do in December when the data flood turns into a data stream? 1. Last night, the US Bureau of Labor Statistics stated that it will not release the non farm payroll report for October, but will include relevant employment data in the November report. In fact, it is acceptable for the market not to release data for October at all, as it is normal for October to be completely suspended without statistical data. The key is that the release of non farm capital in November can be made before the policy meeting on December 10th, but now it will be postponed for one week after the policy meeting. The suspense now is whether the November CPI announced on December 10th will also be postponed. The impact here is that previously, the Federal Reserve was driving in a fog due to missing data, and naturally tended to be conservative and slow down. If there is no latest economic data to guide before the interest rate meeting, then the Federal Reserve will naturally be better inclined towards conservatism. Although the September non farm payroll will be announced tonight, it has already been two months and can only affect its short-term market situation and market expectations, but it is difficult to influence the Federal Reserve's decisions. Previously, the Ministry of Commerce planned to release the November PCE data on the 26th, hoping that there would be no variables. 2. And the minutes of the October Federal Reserve meeting released last night The minutes show that attendees expressed vastly different views on the policy decision most likely to be taken at the December meeting of the Monetary Policy Committee (FOMC): some senior attendees assessed that if economic development meets their expectations between the next two meetings, it may be more appropriate to further cut interest rates in December. Many attendees expressed that based on their economic outlook, it may be appropriate to 'keep interest rates unchanged' for the remainder of this year. Previously, it was believed that the release of November's non farm payroll data (released in early December) and CPI data (released on December 10th) would be the clearest guidance before the December interest rate meeting. Now that these two data have been postponed, the former and the latter may also be postponed. The key anchor point for the market and the Federal Reserve to evaluate inflation and employment is no longer available. In addition, due to the current internal divergence of views within the Federal Reserve, there is a high possibility of continuing to be conservative. This is also shown on today's PolyMarket, where the market predicts that the probability of the Federal Reserve remaining inactive in December has increased to 75%, and interest rate futures on CME show a probability of 72%. It can be said that the market has basically assumed that the Federal Reserve is highly likely to remain inactive in December. 3. What is the probability of the Federal Reserve doing in December Two possibilities: -25bp interest rate cut, hawkish statements -No interest rate cuts, dovish speeches I used to think it was the former, but now I think the latter is very likely because the key data for November cannot be released before the meeting. If it's the latter, why not cut interest rates but speak dovish? 1) Powell's consistent characteristics are gentle and delicate. If there is no data to support the initial interest rate decision, then not cutting interest rates is already a tough stance, and the speech will naturally ease. At the same time, it is also his previous statement that "tariffs on inflation are one-time, but not completed in a month." Looking at the meeting at the end of October, he still made this statement, but he is not sure how long this one-time will last 2) During this period, the market has already felt the impact of liquidity tightness (with a slight decline in the US stock market and a sharp drop in the cryptocurrency market), and the Federal Reserve has also seen signs of liquidity tightness. In this situation, Powell's speech will naturally not be stronger Of course, in addition to Powell's statement, the midpoint chart and economic forecast at the December meeting are also the most important ways to observe the Fed's attitude. After stopping shrinking the balance sheet, plan to return to expanding the balance sheet in the future. https://(x.com)/qinbafrank/status/1991005823351611431? s=46&t=k6rimWsEbo2D2tXolYcM-A Have you talked about https://(x.com)/qinba frank/status/1962686692680400973 in your tweet as early as early September? S=46&t=k6rimWSEbo2D2TXolYcM-A deducts the pace and path of interest rate cuts during the Chinese New Year: interest rate cuts 1-2 times (in September and October, provided that both non farm payroll and inflation in August do not exceed expectations), pause and wait until the inflation effect peaks and falls before returning to the pace of interest rate cuts+YCC+expanding the balance sheet at the right time. The key here is the inflation trend that has been talked about all along. We have also discussed before that the transmission of tariffs to inflation is a cost increase, not a supply interruption. The cost increase is indeed a one-time occurrence, because there is a base effect, and inflation will peak and fall back in the future. The Federal Reserve can wait until there is a clear decline in inflation before continuing to cut interest rates. The market's expectation for a rate cut in December has further decreased from 45% to 27%, but the change in expectations for future conference rate cuts is relatively small, and expectations for terminal interest rates remain relatively unchanged. This may reflect that the overall loose tendency in the minutes has not changed - 'most attendees believe that further downward adjustment... may be appropriate', even if December may be skipped. 4. Looking back at the market We need to observe to what extent the market will price the non interest rate cut in December? Will we continue to be sensitive or slowly slow down to any negative news in the future? For cryptocurrency assets, after market liquidity begins to slowly return, is the net outflow of ETFs representing buyer power gradually decreasing? When will the net inflow begin, and can the scale of net inflow continue to increase? 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