The October PCE data has been delayed again. To put it simply, the statistical system is still being patched. The market was originally counting on this report to bet on the policy direction for December, but now this lead is gone, and we can only dig through the speeches of Fed officials to find clues.

Last Friday, New York Fed's Williams suddenly made a statement that directly reversed the expectation of "no cuts" with just one sentence. This person is not an ordinary board member; what he says can influence the final decision. On the same day, the Fed's second-in-command, Jefferson, also stepped forward to express his stance: this wave of AI is not the same as the internet bubble of the 1990s, and the door to rate cuts is not closed.

These two people spoke one after the other, basically reflecting Powell's meaning. There are really only these three who can make decisions within the Fed; the statements from other committee members are more about posturing and won't change the overall direction. So the probability of a rate cut in December is clearly on the rise now.

What about the statements from the regional Fed chairmen and ordinary board members these days? Those are just icing on the cake. What really changed the expectations were those two big shots last Friday. At this rate, the rate cut trading might have to be speculated until early December before it cools down.

How will the meeting in December play out? I guess a few possibilities:

The first and most reliable approach is to lower rates, but the attitude needs to be a bit firmer. The vote will pass, but the opposing votes are likely to be more than in October, so Powell won't be too dovish at the press conference; it will be more like "conditional lowering."

Second, the dot plot is the main event. The forecast given in the September version was that there would only be one rate cut in 2026. If in December they raise the number of rate cuts for next year to more than two, it would provide a reassurance to the market and counterbalance the cautious tone in Powell's speech.

Third, will the schedule for expanding the balance sheet or purchasing bonds be leaked in advance? It's entirely possible to announce it in December, and if so, it would be overall dovish.

Fourth, what truly affects the market after the meeting is actually the data from November.

The ideal combination is clear: a slight rise in the unemployment rate, continued weakness in new job creation, and inflation below expectations. This is the trifecta that the market longs for, while other combinations tend to be bearish.

Fifth, looking further ahead, it’s about the new chairman candidate. This matter will become the most overlooked variable in next year's policy direction.