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Fed Faces Contentious Dec. 9–10 Decision With Markets Leaning Toward a Quarter-Point Cut

Powell's guidance will signal the scale of dissent during a meeting with delayed government data.

Overview

  • Futures and options pricing put the probability of a 25-basis-point cut around 85%–87%, which would lower the target range to 3.50%–3.75% and mark a third straight reduction this year.
  • Powell has warned a December move is "not a foregone conclusion," keeping the focus on his forward guidance rather than the headline decision.
  • Five of 12 voting officials have voiced skepticism about further easing, putting the prospect of multiple dissents—uncommon since 2019—under close scrutiny.
  • A 43-day federal shutdown has postponed key Bureau of Labor Statistics releases, with the November employment report now scheduled after the meeting.
  • Recent signals are mixed: jobless claims fell to the lowest in more than three years and a Chicago Fed estimate pegs unemployment near 4.4%, while private and prior data show slowing hiring.