Interpretation of the FOMC November meeting minutes: If the pace of interest rate cuts slows down, the Bitcoin bull market may be delayed

The Federal Open Market Committee (FOMC) of the Federal Reserve decided to cut interest rates by one notch at its November meeting, lowering the benchmark interest rate to the 4.50%-4.75% range. Last night (26th), the Federal Reserve officially released the minutes of the November FOMC meeting. Federal Reserve officials stated at the time that they believe inflation is easing, and the risk of a significant slowdown in the economy and the job market has decreased, so they support further interest rate cuts in the future. However, they also emphasized that they will take a cautious approach and "gradually" cut interest rates based on data performance. If inflation data fails to meet expectations, the pace of interest rate cuts may slow or even be suspended. "In discussing the outlook for monetary policy, participants expected that if the data came in line with expectations, with inflation continuing to decline toward 2 percent and the economy remaining close to maximum employment, then 'gradual' moves to a more neutral policy stance would likely be appropriate." However, some analysts believe that after taking profits from the Trump election rally, the Federal Reserve's slower pace of interest rate cuts may delay the emergence of the Bitcoin bull market top. Will the Federal Reserve's pace of interest rate cuts slow down? The meeting minutes also revealed that all 19 officials unanimously approved a one-notch rate cut at this month's meeting. Some officials believe that the upside risks to inflation have hardly changed, while the downside risks to economic activity or the labor market have weakened. Some officials also pointed out that monetary policy needs to balance the risks of easing policy too quickly or too slowly. Easing too quickly could hinder further efforts to curb inflation, while easing too slowly could excessively weaken the economy and employment. Some participants indicated that if inflation remains stubbornly high, the FOMC may "pause" the easing of policy rates and maintain them at a restrictive level. In addition, many officials also believe that the uncertainty about the so-called neutral interest rate level makes it difficult to assess the degree of policy restraint. The neutral interest rate is the policy level that neither restricts nor stimulates economic growth. Officials' estimates of the neutral interest rate have continued to rise over the past year. Chicago Federal Reserve Bank President Austan Goolsbee said on Tuesday that his forecast for the neutral interest rate is close to the median of the Federal Reserve officials' estimates in the September dot plot, which is 2.9%. Federal Reserve officials support a rate cut in December The Federal Reserve will hold its December FOMC meeting on December 18th. Goolsbee this week expects the Federal Reserve to continue cutting interest rates, taking a stance that "neither restricts nor promotes economic activity" and "unless there is some compelling evidence of economic overheating, I don't see a reason not to continue lowering the federal funds rate." Last week, he reiterated his support for further interest rate cuts and expressed openness to acting at a slower pace. On the same day, Neel Kashkari, known as the "hawk king" and president of the Federal Reserve Bank of Minneapolis, explicitly supported the Federal Reserve cutting interest rates in December, saying it was still reasonable for the central bank to consider another 25-basis-point cut in December. "As of today, I'm still thinking about a 25-basis-point rate cut in December - that seems like a reasonable debate for us to have." FedWatch: Probability of a December rate cut exceeds 60% However, given the continued economic resilience in the United States and the recent strong inflation data, several Federal Reserve officials have already urged caution about future interest rate cuts. Federal Reserve Chairman Powell also hinted at a hawkish stance earlier this month, suggesting that officials will cut interest rates "cautiously." "The economy is not sending any signals that would urgently call for rate cuts. The relatively good economic conditions give us the ability to act cautiously in our decision-making." Powell's hawkish signals have also caused the market's expectations for another one-notch rate cut in December to plummet, but after the release of yesterday's FOMC minutes, the market has slightly increased its bets on a one-notch rate cut in December, rising from about 52% yesterday to the current 66.6%, with the probability of a pause in rate cuts now only 33.4%. However, the market and institutions also all predict that the Federal Reserve will slow the pace of interest rate cuts next year. Nomura Securities' latest forecast points out that the Federal Reserve will pause interest rate cuts at the December rate meeting and only cut rates by one notch in March and June 2025; Cathay United Bank's chief economist Lin Qichao said last week that the Federal Reserve will still cut rates by one notch in December this year, and then cut another one notch in March and June next year.