Federal Reserve's' core circle 'collectively turns dovish: December interest rate cut odds skyrocket to 80%, real focus has shifted from inflation to employment collapse risk There is a subtle and dramatic shift in direction within the Federal Reserve. In the past week, several officials who are closest to Powell's position and have the greatest influence have spoken out intensively, expressing a rare attitude of "supporting the December interest rate cut" at the same time. This wave of "core circle turning pigeon" directly pushed the market's expectation of interest rate cut in December from 40% to 80%. The yield of US treasury bond bonds fell across the board, and the financial market quickly repriced. The most crucial people are Mary Daly, President of the San Francisco Federal Reserve, and Christopher Waller, Governor of the Federal Reserve. Daly is seen as Powell's "policy shadow" and has rarely deviated from the chairman's position. However, she made it clear this time that the risks in the job market have surpassed inflation risks, and a "non-linear deterioration" is approaching. Once employment sharply declines, it will be more difficult to save than an inflation rebound. New York Fed President Williams also rarely dovish, stating that downward pressure on the labor market has significantly increased and the Fed needs to "avoid unnecessary harm to employment". The officials' argument shows a collective bias: inflation is not without risks, but the secondary effect of tariffs is not obvious; Employment is currently the most vulnerable part. In other words, the core judgment within the Federal Reserve is shifting from "preventing inflation" to "protecting employment". But the problem arises - due to the government shutdown causing data delays, the Federal Reserve will not be able to see the non farm payroll reports for October and November at the opening of its December meeting. That is to say, the Federal Reserve will make decisions in the absence of data, making interest rate cuts a true test of judgment. Nevertheless, these key officials still believe that the risk of action is low and the risk of inaction is high. Powell will play a key role in reconciling differences at the meeting on December 9-10, which is likely to be the most important policy meeting of the year. The market quickly responded. The pricing of interest rate swaps shows that the probability of a 25 basis point rate cut in December has rapidly skyrocketed to 80%. The yield of two-year US Treasury bonds has fallen sharply, and the yield of ten-year bonds has hit a new low this month. Investors clearly feel that the most important individuals within the Federal Reserve are turning the steering wheel towards easing. The bond market is not only driven by sentiment, but also supported by technical buying: the rebalancing of the index at the end of the month will stimulate the purchase of long-term bonds, and there will be large-scale five-year and seven-year treasury bond bond auctions this week. The strong demand for the auction of two-year treasury bond on Monday further strengthened the market's bet on the path of interest rate reduction. Nowadays, the core of the controversy is no longer whether to cut interest rates, but whether the Federal Reserve can make the choice of "avoiding a hard landing on employment" in the absence of data? The December resolution will be a comprehensive test of the Federal Reserve's judgment, consensus building ability, and risk appetite. The market has already placed a bet. Now we are waiting for the final decision of the Federal Reserve.