$BTC

core Conclusion: Powell has a 70-80% probability of signaling dovish(supporting rate cuts) in his October 15 speech, but likely with cautiously neutral wording to avoid appearing as a full pivot to easing.

Key Factors

Economic Data:

- Cooling labor market: low unemployment but downward revisions to new jobs

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- Inflation above target: core PCE 2.9%, core CPI 3.1%

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- Slowing growth: H1 GDP 1.89%, data gaps from government shutdown

Policy Context:

- September 25bp cut;on further cuts this year

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- Powell views cuts as "defensive," emphasizing data dependence

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- Political pressure exists but Fed independence must be maintained

Market Expectations:

- 98.3% probability priced in for October cut

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- Divided views among institutions on future path

Internal Dynamics:

- Doves advocate aggressive cuts for labor market concerns

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- Hawks warn about inflation risks and anchored expectations

Likely Balancing Act

1. Confirm cutting path but stress data dependence

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2. Downplay easing expectations to prevent over-speculation

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3. Warn about inflation risks, reaffirm 2% target

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4. Address political pressure through data-focused messaging

Market Impact

- In-line: Brief rally in Bitcoin and risk assets

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- Unexpectedly hawkish: Potential 10-15% correction

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- Watch for: Remarks on inflation path and employment sustainability