On September 18th (local time),the Federal Reserve announced its first interest rate cut in over four years,unexpectedly lowering the federal funds rate by 50 basis points,opening up the imagination for the extent of subsequent rate cuts.

However,when the market generally expected the Federal Reserve to maintain a 50 basis point rate cut for the year,the non-farm employment data released by the United States brought an unexpected shock to the market,causing some cooling of the previous optimistic expectations.

Data released on October 4th (local time) showed that in September,254,000 non-farm jobs were added,the largest increase in six months,far exceeding the expected 140,000; the unemployment rate unexpectedly fell back to 4.1%,expected to be 4.2%; average hourly wages rose by 4.0% year-on-year,expected to rise by 3.8%.These data all exceeded market expectations.

It is reported that after the economic data for September was disclosed,according to the "Fed Watch Tool" of the Chicago Mercantile Exchange (CME),the probability of the Federal Reserve doing nothing in November has jumped significantly,and the probability of a routine rate cut of 25 basis points has decreased,but it is still the "mainstream voice",and the voice for a 50 basis point rate cut has significantly weakened,almost inaudible.

Among them,JPMorgan Chase and Bank of America currently expect that when the Federal Reserve meets again in November,it will cut interest rates by 0.25 percentage points,previously calling for more rate cuts and expecting a 0.5 percentage point cut; Citigroup changed its forecast for the Federal Reserve,expecting a 25 basis point rate cut in November instead of 50 basis points; CICC also pointed out that the necessity for the Federal Reserve to cut interest rates by 50 basis points again has decreased,and it is expected that there will be a 25 basis point rate cut in November.

On Tuesday,October 8th (local time),Ray Dalio,the founder of Bridgewater Associates,also said that after the Federal Reserve policymakers lowered the federal funds rate by half a percentage point,it is expected that there will not be a "large-scale rate cut" next.

Looking at the recent statements of Federal Reserve officials,among them,the "third in command of the Fed" New York Federal Reserve President Williams said that the U.S.economy is ready for a "soft landing" and supports a 25 basis point rate cut in November; the 2025 voter,St.Louis Federal Reserve President Mersalum said that the cost of being too fast and too aggressive in easing is higher than the cost of being slow to act,and a gradual rate cut would be appropriate.

Overall,the expectation of a rate cut by the Federal Reserve in November has clearly cooled compared to before,and a 25 basis point cut has become the consensus of more people,and a pause in rate cuts is also not ruled out.

It is worth noting that the situation of the Federal Reserve's rate cuts is highly watched and has a profound impact on various assets such as stocks,bonds,and gold.

It is understood that the significant reduction in rate cut expectations has weakened the rise in gold prices,and gold prices have been under pressure in the short term.However,Guoxin Futures recently stated that the market has reassessed the potential future interest rate cut path of the Federal Reserve,which could lead to a significant turning point in the prices of major asset classes.Amidst the uncertainty of economic prospects and the constant changes in risk appetite,the trends of international major asset classes may continue to diverge: gold prices may continue to rise against the backdrop of global geopolitical risks and inflation expectations,although the pace of increase may slow down; industrial metal prices may achieve a larger increase due to the market's optimistic expectations for an economic "soft landing."

Additionally,with the disappearance of expectations for a significant interest rate cut by the Federal Reserve,the US dollar index has strengthened,short positions on US Treasuries have begun to emerge,US Treasury prices have fallen,and yields have risen,with the 10-year US Treasury yield breaking through 4% for the first time since August.

Ray Dalio,founder of Bridgewater Associates,stated that,given the recent fluctuations in the US bond market,bonds are a high-risk investment.Dalio said,"US Treasuries are not a good investment.We face interest rate risks in the bond market.Compared to the bond market,the stock market is relatively attractive,but the US stock market is highly concentrated in increasingly expensive technology and artificial intelligence-related stocks."

Data shows that on October 8th (local time),after a 4.05% increase,the stock price of AI leader NVIDIA (NVDA.US) inadvertently climbed close to an all-time high again; technology stocks such as Broadcom (AVGO.US),Oracle (ORCL.US),and Microsoft (MSFT.US) also mostly welcomed increases.

China Merchants Securities recently stated that the Federal Reserve's interest rate decision in the fourth quarter will be affected by oil prices and inflation trends.If inflation and oil prices rise,it may limit its further interest rate cut space.In addition,the cooling of interest rate cut expectations may support the strengthening of the US dollar.For the US stock market,the performance of economic data and election results will be key,which may lead to a divergence in the performance of US stocks and the US dollar.

Furthermore,if the market suddenly realizes that the Federal Reserve's interest rate cut is not as expected and the US dollar will not depreciate significantly,non-US assets may face pressure.

It is worth mentioning that the recent surge in the Hong Kong stock market,in addition to the stimulus of a series of major domestic policies,has also benefited from the favorable outcome of the Federal Reserve's unexpected interest rate cut.The cooling of expectations for a significant interest rate cut by the Federal Reserve may have an impact on the Hong Kong stock market,and the relevant situation is worth tracking and attention.