Overview
- Markets widely expect a 25 basis point reduction today, which would set the target range at 3.50%–3.75% and mark a third consecutive cut, with surveys showing roughly 87% odds.
- Public statements indicate at least 10 of 19 participants have questioned the case for easing, raising the prospect of an unusually split vote on the decision.
- A recent government operational shutdown postponed key releases for October–November employment and November inflation until next week, leaving policymakers without full data.
- President Trump has intensified pressure for faster cuts, is interviewing candidates to succeed Chair Jerome Powell including Kevin Hassett and Kevin Warsh, and is expected to announce a pick in January.
- Kevin Hassett said there is “much room” to continue cutting, while investors price additional reductions into 2026 and emerging markets such as Argentina track the Fed’s message for effects on borrowing costs.