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8h ago

Fed Split Deepens on December Rate Path as Treasury Cites Housing Recession

A government data blackout has heightened uncertainty around the December rate call.

A "For Sale" sign stands in front of a house, on the North Shore of Long Island city of Glen Cove, New York, U.S., August 12, 2025. REUTERS/Shannon Stapleton
The Bank hasn't cut rates since August, and will be closely looking at the upcoming Budget's impact on the economy before deciding to reduce the figure (Photo: Karl Hendon/Getty)
A man walks past the Bank of England building in London, Britain, August 4, 2025. REUTERS/Hiba Kola/File Photo
US Treasury Secretary Scott Bessent attends a press conference held by U.S. President Donald Trump and UK Prime Minister Keir Starmer at Chequers at the conclusion of a state visit on September 18, 2025 in Aylesbury, England. Leon Neal/Pool via REUTERS/File Photo

Overview

  • The Fed cut rates to 3.75%–4.00% on Oct. 29 with rare opposing dissents, as Governor Stephen Miran sought a 50-basis-point move and Kansas City Fed President Jeffrey Schmid preferred no cut.
  • Multiple officials including Schmid, Dallas Fed President Lorie Logan, and Cleveland Fed President Beth Hammack said they would have held steady, reinforcing Jerome Powell’s warning that a December cut is not a foregone conclusion.
  • Treasury Secretary Scott Bessent urged faster easing and said housing is effectively in recession due to high mortgage rates, arguing that prolonged tight policy raises broader downturn risks.
  • Governor Christopher Waller said he favors another cut in December, citing easing underlying inflation and a cooling labor market despite the lack of official data.
  • Investors scaled back near-certain bets on a December cut as hawkish commentary mounted and the shutdown delayed key releases like the PCE inflation gauge, pushing policymakers to lean on private indicators.