Last night, when the Fed's October meeting minutes were released, the market exploded.

The internal division has split into three factions, and there's an ongoing heated debate about whether to lower interest rates in December. Powell now feels like he's holding the steering wheel but has driven into thick fog—nothing is visible ahead; should he accelerate or brake? No one knows.

First, let's talk about how intense this internal struggle is. The wording in the minutes can't hold back anymore:

Several officials are determined to cut by 25 basis points, reasoning that if the economic data does not turn out unexpectedly, action must be taken in December. However, many officials (note this word, "many" carries much more weight than "several" in the minutes) directly called for a halt and insisted on holding steady. Even more extreme, some are calling for a direct cut of 50 basis points, while others completely disagree with any cuts.

After the noise, market expectations collapsed immediately. The data from the CME FedWatch tool is very straightforward: the probability of a rate cut in December dropped from 50% to less than 30%, while the probability of no change surged to nearly 70%.

But the real problem isn't the argument; it's that the data is completely cut off.

The government was shut down for 44 days, and economic data has completely gone into a black box. The September employment report has been delayed for a month and a half, and we will only see it this Thursday. What about the official employment data for October? It has been canceled outright and will never exist. Before the next FOMC meeting, the Fed will basically be guessing about the employment situation since October.

Private institutions have been sounding the alarm: the new jobs added in September may only be 17,000, far below the market expectation of 50,000. The number of people continuing to receive unemployment benefits has surged by 40,000, and layoff announcements from companies are everywhere.

How should we play this game? The first big pit of the year 2025 has already been dug.

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RugpullSurvivor

· 11-21 07:52

Powell really is Schrödinger's rate cut—cutting and not cutting at the same time, leaving the market completely baffled. Speaking of which, this data black box is truly incredible. No employment data forever, so the Fed relies on guesses to decide interest rates? That's hilarious. That guy who suggested a 50 basis point move really dares to think big. Everyone else must be stunned. A shutdown is a shutdown, anyway, it makes no real difference to us retail investors—whether they lose or not, they will. Whether they cut or not is a trap; better to gamble on the 1.7 million employment probability. It’s unbelievable—the data is cut off, yet they still pretend to know how the economy is doing. That’s the insider info of the Federal Reserve. After this Thursday’s employment report is released, the market is bound to explode. Now is the time to get on board.

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LiquidityWizard

· 11-20 04:55

actually, the real play here isn't even the rate call—it's the data gap. 70% no cut odds look comfy until you realize they're basically pricing in a coin flip disguised as certainty. given the historical data on employment volatility, this lack of october figures is... statistically significant in all the wrong ways.

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OvertimeSquid

· 11-20 04:54

Powell, this is gambling. Making decisions during the data black box period, who wouldn't be anxious?

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SilentObserver

· 11-20 04:46

Powell's hand is indeed terrible, and the data black box is ridiculous. --- Whether to lower or not has truly become Schrödinger's interest rate, and no one can bet in this round. --- The government shutdown directly deleted the October data, this operation is amazing, let the Fed guess blindly. --- The three factions are at each other's throats, and the market is on a roller coaster; whether to cut in December is really uncertain. --- Only 17,000 jobs data? This is the killer move; it will explode at the beginning of next year. --- Layoffs are everywhere, yet they pretend not to see it; the Fed's days are hard.

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BanklessAtHeart

· 11-20 04:39

The Fed is now like Schrödinger's interest rate cut, both cutting and not cutting; the market felt reassured only to turn around and drop it in their hands. This data black box is truly incredible, making decisions like blind men touching an elephant; December's move is purely a matter of luck. Halving the employment data feels a bit frustrating; the real situation might be worse than what's publicly stated. Powell must be feeling quite uncomfortable right now, holding a bunch of bad cards while trying to appear confident. The probability of an interest rate cut has shifted from fifty-fifty to thirty percent; the market's reaction this time is exceptionally fierce.

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