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Fed’s December Rate Cut Hangs in the Balance as Officials Split and Data Go Dark

With key inflation and jobs reports delayed by the shutdown, policymakers face a December choice without their usual guideposts.

Overview

  • Short‑term interest rate futures now price roughly a 55% chance of a cut at the Dec. 9–10 meeting, down from stronger odds weeks earlier.
  • San Francisco Fed President Mary Daly said it is premature to decide on December and described herself as open‑minded, noting balanced risks after two cuts this year; she is not a voter in 2025 but joins the policy debate.
  • Boston Fed President Susan Collins said she sees a relatively high bar for more easing and would be hesitant to cut again without clear labor market deterioration.
  • White House guidance indicated official inflation and employment data may not be published in time, forcing heavier reliance on private indicators and contributing to the market’s near‑even odds.
  • Chair Jerome Powell previously said another move next month is “far from” assured, while a private estimate from Apollo suggests prices on 55% of CPI items are rising faster than 3%, complicating the case for immediate easing.