The federal funds futures market currently predicts that the probability that the Federal Reserve will not raise interest rates again this year has risen to 24%. Compared to previous market expectations after the release of hot CPI data, this can be described as a drastic shift. Meanwhile, the bond market is also undergoing a drastic repricing: 2-year US Treasury yields fell 18 basis points to 4.64% on Thursday. The latest pricing shows that for next week's US Federal Reserve interest rate meeting, the market is currently betting on an interest rate hike of only 7%, a new low this month; the probability of raising interest rates in December is still 76%, but it is no longer certain; and the January swap pricing also only reflects a 27 basis point increase in interest rates — in other words, the market currently believes that the Fed may only raise interest rates once during the next three meetings. The direct trigger for this round of markets was the “disappointment” of the suspected bursting of the AI bubble — in the face of the bottomless scale of capital needed to maintain huge computing power, investors' psychological defenses were finally lost. Meta threw out huge guidance on capital expenditure of “hundreds of billion dollars” in financial reports and filings, which directly shocked market sentiment, and its intraday response fell by nearly 7%; while management tried to allocate capital by adding new shares without voting rights, the resulting equity dilution effect also attracted strong resistance from investors.

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