I have always believed that there will be no interest rate cuts in December. It's not just a wild guess; it's about understanding their decision-making logic—put simply, it's about choosing the path that is least likely to backfire.

First, let's talk about the most crucial point: the cost calculation of avoiding mistakes.

What does the Federal Reserve fear the most? It's not the market criticizing them for being conservative, but the fear of a repeat of the inflation disaster of the 1970s. That was a policy mistake written in textbooks. For Powell, this historical stain is the biggest risk.

Consider these two situations:
- The interest rate was cut in December, and as a result, the inflation data for January showed that inflation has risen again. Now, this is great, as it has been directly nailed to the "reckless policy" pillory.
- There was no reduction in December, resulting in signs of economic recession in January. At most, it could be criticized as "slow to respond," but it is not a principled error.

Which cost is smaller? An astute person can see it clearly. Being slow to act can be justified, but making a wrong move cannot be defended.

Looking at the hard constraints on the data level.

It doesn't matter how dovish the officials say, the fact that core inflation is still above 2% is an unchangeable reality. The Federal Reserve's responsibility is to "meet the inflation target," not "close enough is good enough." Moreover, during the December meeting, the complete employment and inflation data for November had not yet been released. Do you think they would use their most critical policy tool with incomplete information? It's unlikely. Waiting until January, when the data is complete, to make a decision is the prudent approach.

The last detail that many people overlook is: the "dovish pause" strategy is actually very clever.

What does the market want? It is a signal of eased financial conditions. This signal does not necessarily have to be conveyed through an immediate interest rate cut. Maintaining the interest rate in December while simultaneously significantly lowering the dot plot expectations for 2026 can achieve the same goal. It meets market expectations while leaving room for maneuver.

So my judgment is very simple: when uncertainty is so high, the Federal Reserve will definitely choose the path of "it won't be too embarrassing even if it's wrong." Staying put in December is the inevitable result of this logic.

For the crypto market, this means that we shouldn't expect a deluge of liquidity in the short term. However, looking at a longer time frame, as long as inflation is indeed decreasing, the rate cut cycle will eventually come. What's the rush?