The final FOMC meeting of 2025 is set to take place on December 10 (U.S. Eastern Time), corresponding to early Thursday morning Beijing time, with global markets closely watching the Federal Reserve's every move.
For futures investors, while the market widely expects a 25-basis-point rate cut at this meeting—with recent rebounds in precious and non-ferrous metals already partially pricing in this expectation—the real focus lies in potential "expectation gaps" that could emerge from key details.
These details include the latest "dot plot" guidance on future rate-cut paths, the extent of internal voting disagreements within the Fed, and Chair Jerome Powell's remarks on economic outlook and policy flexibility during the press conference. Together, these factors will shape the trajectory of long-term U.S. policy rates.
1. **The Dot Plot: Decoding the Rate Path** The Fed’s dot plot is essentially an "interest rate expectation chart," reflecting anonymous projections from Fed officials on future rate movements—a crucial tool for gauging policy direction.
In simple terms, the dot plot is a scatter chart: the horizontal axis represents time (e.g., 2025, 2026, and the "longer run"), while the vertical axis shows interest rate levels. Each dot signifies an official’s view on the "appropriate" rate by year-end.
Although the September dot plot hinted at one rate cut each in 2026 and 2027, recent shifts in the Fed’s internal dynamics—such as the departure of former Governor Kugler and her replacement by the more dovish Milan, alongside potential dovish continuity under Trump-aligned frontrunner Hassett—may have altered some officials' stance. If the updated dot plot signals broader support for additional cuts, it could catalyze another rally in precious and non-ferrous metals.
Moreover, the dispersion of dots reflects internal divisions. Widely scattered dots indicate high uncertainty, which could unsettle markets.
2. **Policy Statement Nuances & Powell’s Tone** Beyond the dot plot, the wording of the policy statement and Powell’s press conference remarks are equally critical. Market bulls dread hawkish phrases like "inflation remains resilient" or "policy will remain data-dependent." Conversely, if Powell highlights labor market softening or expresses stronger confidence in taming inflation, it could reinforce easing expectations.
Such subtle language shifts will directly shape market interpretations of future rate paths, triggering dollar index volatility and ripple effects across commodities.
3. **Internal Divisions: Voting Signals** The voting outcome is another key gauge of Fed unity. Multiple dissents would signal significant internal discord, implying policy unpredictability. A unanimous vote, however, suggests broad consensus, stabilizing expectations for the easing cycle. For investors, lower dissent typically means reduced volatility from policy uncertainty.
**From "Known" to "Unknown"** In summary, this FOMC meeting’s significance for futures markets lies in shifting focus from "betting on cuts" to "deciphering details." Traders should closely monitor the dot plot’s long-term rate signals, the policy statement’s tone, and voting splits. While a 25-bp cut may already be priced in, any surprises could reignite volatility in rate-sensitive assets, warranting caution against "buy the rumor, sell the news" dynamics. As the meeting nears, investors should brace for potential risks and manage positions prudently.
*Data sources: Federal Open Market Committee (FOMC), Guotai Junan Futures Research.* *Disclaimer: This content is for educational purposes only and not investment advice. Views expressed are the author’s own and do not represent the firm’s stance. Unauthorized reproduction or modification is prohibited.*
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