The Fed's "civil war" escalates, and Powell may be unable to stabilize the "hawkish" stance

On December 10, the Federal Reserve experienced its largest internal disagreement in recent years, with Powell facing a difficult coordination task. The market expects the Fed to cut interest rates by 25 basis points tonight, but Powell may avoid signaling a further rate cut in January next year to appease hawks. US banks believe Powell might suggest that only significantly weakening employment data would trigger another rate cut, or emphasize that the benchmark interest rate is already near neutral. Currently, 5 officials support a rate cut, 3 officials have an unclear stance, and 2 officials support holding steady.