Tonight at 3 a.m., the Federal Reserve is expected to take significant action, but this time it might be different.

Cutting interest rates by 25 basis points? The market has long guessed that. The key is how they will cut — it’s very likely to involve a “cut while dampening expectations” approach. They may give some relief, but implicitly suggest not to expect many more opportunities. The threshold for policy changes is actually gradually being raised.

The current situation of the Federal Reserve is quite delicate: signals from the employment sector are not very good, layoffs are increasing, and new job creation is shrinking. Some officials have already openly stated that employment faces downward pressure. But on the other hand? Inflation remains a major challenge. The core PCE index is stuck at 2.8%, and with the impact of tariff policies, inflationary pressure has not eased.

So this meeting is not just about whether to cut or not, but also about listening to how they will express their stance on the future. Market volatility might be in these details.