Federal Reserve officials have explicitly advocated for interest rate cuts, and market expectations for a December rate cut have surged to over 70%.

According to Odaily Planet Daily, after Federal Reserve officials publicly disagreed on interest rate levels, market expectations for a December 10 rate cut were widely doubtful. However, following comments from New York Fed President Williams supporting a rate cut, market sentiment dramatically shifted, with investors and economists generally believing that the Fed is highly likely to implement a rate cut in December.

Wells Fargo chief economist Tom Porcelli stated that the deteriorating labor market provides a reasonable basis for a Federal Reserve rate cut in December. Official data shows that the unemployment rate climbed to 4.4% in September, the highest level in nearly four years. Deutsche Bank chief U.S. economist Matthew Luzzetti bluntly stated that the job market remains "in a precarious state."

Vanguard Group senior economist Josh Hirt revealed that his key basis for judging that the Federal Reserve would cut interest rates was Williams' public remarks last Friday. As a close ally of Federal Reserve Chairman Powell, Williams explicitly advocated for a rate cut and stated that he "still believes there is room for further adjustments to interest rates in the near term."

This statement immediately ignited the financial markets, with expectations for a December rate cut surging from nearly 40% the day before to over 70%. Josh Hirt pointed out that Williams' stance means that three of the Fed's most influential officials—Powell, Williams, and Fed Governor Waller—all support a new round of easing, forming a "very powerful and difficult-to-shake camp."

Krishna Guha, Global Head of Policy and Central Bank Strategy at Evercore ISI, analyzed that the phrase "in the short term" most directly refers to the next meeting (i.e., the December meeting). He believes that signals from the Fed's "Big Three" of leadership are almost always approved by the Chairman.

Despite growing consensus on interest rate cuts, economists still expect some officials to vote against them at the meeting. Boston Fed President Collins and Dallas Fed President Logan both expressed hesitation about further rate cuts. Former Cleveland Fed President Mester analyzed that Powell might use the December 10th press conference to convey a key message: this rate cut is an "insurance cut," after which the Fed will observe the economy's response. It is worth noting that due to the government shutdown, the Fed will not be able to obtain the latest employment and inflation data at this meeting. (Jinshi)