Interest rate cut confirmed in December? The Federal Reserve (FED) spokesperson: Inflation data rises moderately.

Nick Timiraos parses PPI and lagging data, and the market is betting on an increased probability of Fed rate cuts in December (Synopsis: The probability of a rate cut jumped to 73% in December!). Fed Williams Pigeon: Fed still has room to cut interest rates in the near future) (Background supplement: Fed Pigeon Pigeon's interest rate cut in December broke 80%, Bitcoin rushed to $89,000, Ethereum $2900, U.S. stocks rose) Ginkgo biloba began to turn yellow, and the focus of Wall Street discussions was not President Trump, but the “overdue” report produced by Nick Timiraos, chief economic reporter of the Wall Street Journal. The reporter, known as the “Federal Reserve”, pointed out that the September producer price index (PPI) jumped 0.3% month-on-month, but the core inflation momentum is still cooling, and the stumbling block of the Fed's (Fed) rate cut in December is being removed piece by piece. Hot on the surface, cold on the inside: PPI rise is just “puffy” According to data released by the US Bureau of Labor Statistics, PPI rebounded in September due to energy and food pulls, seemingly rekindling inflation. However, Timiraos stressed that core PPI growth is still hovering at 2.6% to 2.9% annualized as long as the two volatile costs are stripped away. He reminded readers that the Fed is more concerned about the service line items that will be included in the PPI (PCE), such as medical care and air tickets, which were “quite calm” in September. According to the detailed analysis of producer prices, the price increase on the production side has not been smoothly transmitted to the consumer side, allowing officials to regard this wave of wholesale price fluctuations as temporary noise. Black box after shutdown: lagging data anti-reinforcement easing theory The federal government shutdown earlier this year shut down statistical units and delayed the release of economic figures across the board. Now the Fed is preparing to hold a FOMC meeting on December 9-10, but it lacks the new inflation readings for October and November, and only this PPI, which is two months behind, can be used as a reference. Timiraos cautioned in the report that the data vacuum has weakened the hawks' argument for a rate cut: if the latest numbers are not available, it will be difficult to prove that inflation has rebounded. Market discussions also pointed out that in the absence of information, officials are more inclined to take preventive action than to wait for the unexpected to happen. PCE Outlook: 0.19% Monthly Growth Provides a “Safety Window” According to Citi and Inflation Insights, the upcoming September core PCE monthly growth rate may only be 0.19% to 0.2%, and the annual growth rate is likely to further reduce from 2.9% to 2.8%. If true, this would confirm that inflation is back on track with the Fed's 2% target. Timiraos quoted officials as thinking inside: “In the context of a weakening labor market and a slowdown in core prices, the path of least resistance is easing.” According to PCE expectations analysis, the market has raised the probability of a rate cut in December to about 75%, and is betting that the interest rate range will fall in the first quarter of next year at 3.50%–3.75%. Market bet: rate cut button on standby Money flows show that the bond yield curve moved down quickly after the Timiraos report, indicating that traders are pricing in easing in advance. Although Fed Chairman Powell publicly maintains a “data dependence” position, unless there is an unexpected surge in the PCE announced on December 5, it is difficult to find a strong reason not to cut interest rates at the decision-making level. For the Trump administration, maintaining a moderate monetary environment can help avoid a hard landing early in the second term; For the Fed, a modest release of interest rate pressures at a time when inflation trends are downward and employment is slowing could leave a buffer for next year. In summary, the recovery of PPI is like the cusp of a short swell, while the tide direction is still towards a slowdown in inflation. By parsing the lagging data, Nick Timiraos has charted an easy path for the market: as long as the next PCE does not “thunder”, the interest rate cut button at the December meeting is likely to be pressed. Bloomberg analysts warn: Bitcoin will fall to $50,000 next year! BTC is now facing three major dead holes The other side of the American AI boom: “working” for Chinese bitcoin miners On-chain data analysis: Is it now suitable for bottoming Bitcoin? 〈December interest rate cut confirmed? Fed Microphone: Inflation Data Rises Moderately" This article was first published in BlockTempo's “Dynamic Trends - The Most Influential Blockchain News Media”.