In today's complex and volatile global economic environment, the monetary policy decisions of central banks have become an important indicator of the financial market. Recently, the interest rate decisions and related policy dynamics of the Federal Reserve and the Bank of England have not only aroused the nerves of investors, but also had a profound impact on the direction of the global financial market.

The latest U.S. inflation report released on Wednesday showed that the headline CPI in December was largely in line with expectations, while the core CPI eased. The U.S. CPI monthly rate in December was 0.4%, the highest since March 2024, higher than market expectations and the previous value of 0.3%; the U.S. CPI annual rate in December was 2.9%, in line with expectations and higher than the previous value. There has been a slight increase of 2.7%. The monthly rate of the unadjusted core CPI in December was 0.2%, in line with market expectations and lower than the previous value of 0.3%. The annual rate of the unadjusted core CPI in December was 3.2%, the lowest since August 2024. Market expectations Unchanged at 3.3%.

The markets may be volatile in the coming months, but there are ways to avoid the fray and earn solid gains. Although the Federal Reserve has been cutting rates since September, long-term Treasury yields have bucked the trend and climbed sharply. Treasury yields move inversely to prices, a dynamic that has hit long-term Treasury funds hard. What happens next depends on a number of factors, including the Fed's next move, the U.S. fiscal situation, inflation expectations, and the policies of President-elect Trump. Fed Chairman Powell has already taken a more hawkish stance, preparing for two additional quarterly rate cuts in 2025.

A month ago, the hot topics in the market focused on Trump and his US economic blueprint to promote economic growth next year and in the future. However, as the Christmas holiday approaches, Federal Reserve Chairman Powell's hawkish turn has once again become the focus of the market, bringing the issue of inflation back into investors' attention and triggering the biggest market turmoil since Election Day.

At the policy meeting on December 19, the U.S. Federal Reserve (Fed) announced its third interest rate cut this year, a 25 basis point cut, adjusting the federal funds rate target range to 4.25%-4.5%. This decision was in line with market expectations, bringing the Fed's cumulative interest rate cuts this year to 100 basis points.

As Federal Reserve policymakers prepare to hold their final meeting of the year this week, the market is widely expected to cut interest rates by 25 basis points. Of greater interest, however, is their latest assessment of the economic outlook and the path to interest rate cuts. The Fed is currently facing a debate over productivity growth, which could affect their views on economic capacity and inflation control.