Will the Fed cut interest rates within two weeks? Inflation data is troubling, who will break the "fog" of long-term interest rates?

XM Foreign Exchange APP News - A survey of economists showed that a month ago, economists expected only one more interest rate cut this year. However, the new forecasts www.vifu.nete as Fed policymakers have recently shifted expectations for further rate cuts. Fed policy priorities: Prioritize responding to labor market weakness. Faced with the twin risks of tariffs pushing up already high inflation and further weakening of the labor market, the Fed seems to have prioritized the latter, which also prompted it to implement its first 25 basis point interest rate cut since December last month. Details of interest rate cut forecasts in October and December: Most support but differences exist among the 117 economists surveyed, with only 2 holding different views. The remaining 115 all predict that the Federal Reserve will cut interest rates by another 25 basis points on October 29, bringing the interest rate range to 3.75%-4.00%. Two others expected a 25 basis point interest rate cut in October and a 50 basis point interest rate cut in December. As for whether to cut interest rates again in December, the majority dropped to 71%. The survey was conducted from October 15th to 21st. Market and FOMC attitudes: Traders are more confident, officials focus on the job market Financial market traders are more confident and have already weighed in on interest rates. The median forecast in an HSBC survey shows that the unemployment rate will remain at the current level of around 4.3% on average annually through 2027, which is basically the same as last month's forecast. The latest survey shows that the Fed's inflation target, measured by personal consumption expenditures (PCE), is 2%, and the inflation rate is expected to average above 2% annually through 2027. Delayed official data due to be released on October 24 is expected to show consumer inflation rose to 3.1% last month from 2.9% in August. Worth notingWhat is interesting is that during the U.S. government shutdown, the troubling inflation data has kept the 10-year U.S. Treasury yield still in a downward channel, as if the market's bets on the Federal Reserve's interest rate cuts have not ended at all. At the same time, U.S. President Donald Trump has been putting pressure on Powell to significantly cut interest rates for several months. "The risk is that there may be more interest rate cuts next year," said Brett Ryan, senior U.S. economist at Deutsche Bank. "Compared with any previous administration, the risk of the Fed losing its independence has increased." Summary: The current Fed policy path presents "short-term clarity." The short-term market and most economists have reached a consensus of "two more cuts of 25 basis points this year". An October interest rate cut is almost a foregone conclusion. Although the probability of an interest rate cut in December has dropped slightly, it is still a high-probability event. This expectation has also been reflected in the pricing of interest rate futures. However, policy uncertainty still persists throughout the medium and long term: on the one hand, there are significant differences in priorities within the FOMC on "weak job market" and "inflation risks", and the government shutdown has led to delays in key economic data, making it more difficult for the Federal Reserve to judge the "demand vs. supply" logic behind the employment slowdown; for the financial market, in the short term, it is necessary to focus on the delayed release of inflation data on October 24 and the speeches of Federal Reserve officials to verify the logic of interest rate cuts; In the long term, it is necessary to track the resilience of the job market, inflation trends and changes in the leadership of the Federal Reserve. These factors will jointly determine the subsequent turning point of interest rate policy, which will in turn affect the U.S. dollar, treasury bonds, and the U.S. dollar. Thanks for the support!

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