Powell Faces Challenges Amid Fed's Expected Rate Cut

According to BlockBeats, despite the anticipated Federal Reserve rate cut, the main concern is how Chairman Jerome Powell will communicate the outlook for further easing next month. As divisions grow among Fed policymakers between hawkish and dovish stances, Powell faces a challenging task at this week's central bank meeting. Wall Street expects a 'hawkish rate cut,' suggesting Powell may avoid signaling a January rate cut to appease hawkish members after joining the dovish camp this month. Analysts from Bank of America noted that Powell is dealing with one of the most divided committees in recent years. They believe he will attempt to balance the expected rate cut with a hawkish stance during the press conference, similar to his approach in October. However, Powell has consistently stated that policymakers have no predetermined path, and rate changes will depend on forthcoming data. Bank of America expressed skepticism about Powell's ability to achieve a 'hawkish rate cut' easily, given the significant market-impacting data releases between meetings, some delayed due to a government shutdown. Similarly, Michael Feroli, Chief U.S. Economist at JPMorgan, expects Powell to emphasize that after this week's rate cut, interest rates will be near neutral levels. Therefore, any additional easing would depend on substantial deterioration in the labor market rather than risk management considerations.