As the end of October approaches, the global financial community's attention is once again focused on the Federal Reserve's movements. Several internationally renowned media outlets have reported that the Federal Reserve is likely to announce a 25 basis point interest rate cut at its monetary policy meeting on October 28-29. This move is seen as the most significant policy adjustment for the second half of 2025.

The financial markets seem to have anticipated this. The pricing of federal funds rate futures reflects that investors' expectations for a "rate cut in October" have exceeded 90%. However, the context of this rate cut by the Federal Reserve is significantly different from previous easing cycles; it is both a passive response to the current economic situation and may also become a trigger for a new round of risks.

Despite the inflation rate still being above the long-term target of 2%, the U.S. economy has recently shown obvious signs of cooling. The latest non-farm employment data has declined for two consecutive months, revealing structural weakness in the job market; the consumer confidence index and the manufacturing purchasing managers' index (PMI) have both fallen, and there are also signs of insufficient growth momentum in the capital markets.

What is even more concerning is that the "partial shutdown" of the U.S. government has caused delays in the release of some important economic data, which puts the Federal Reserve in a predicament of insufficient information when making decisions. As some analysts have pointed out, the Federal Reserve is currently facing "interest rate cuts with visibility lower than ever."

In the absence of critical data support, the Federal Reserve may still have to take action to maintain market stability and economic growth. The pressure to make significant decisions amid uncertainty highlights the complexity of the current economic environment and the difficulties of central bank decision-making.

As expectations for interest rate cuts rise, financial markets will closely monitor every move and statement from the Federal Reserve. This is not only related to the short-term direction of the market but will also have a profound impact on the global economic landscape. In the delicate balance between economic data and policy expectations, the Federal Reserve's decisions will undoubtedly become the barometer for global financial markets in the coming period.