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2h ago

Markets Price In December Fed Cut After Dovish Signals From Top Officials

Traders now see a high probability of a 25-basis-point move, with the outcome dependent on delayed economic reports due this week.

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Overview

  • CME FedWatch shows roughly 75% to 85% odds of a 25-basis-point cut at the Dec. 9–10 FOMC meeting, up from about 42% a week earlier.
  • New York Fed President John Williams flagged room for a near-term adjustment, and Governor Christopher Waller and San Francisco Fed President Mary Daly voiced support for lowering rates.
  • U.S. equities rallied as expectations firmed, with the Nasdaq up about 2.7% and the S&P 500 up roughly 1.6%, while longer-dated Treasury yields slipped.
  • Backlogged indicators start to return after the shutdown, with September retail sales and producer prices due Tuesday and additional reports queued up this week.
  • Some policymakers remain hesitant and the decision hinges on incoming data, keeping markets sensitive after earlier November volatility tied to AI-driven valuations.