A slew of Fed officials have expressed uncertainty about a rate cut during the December Federal Open Market Committee (FOMC) meeting. Some officials, including Atlanta Fed President Raphael Bostic and Minneapolis Fed President Neel Kashkari, are concerned about persistent inflation above the Fed’s 2% target. Yesterday, Bostic announced that he would retire once his term ends in February 2026.
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“For those keeping score at home, that’s now four Fed presidents with a vote (Collins, Musalem and Goolsbee, plus Schmid who dissented against an October cut) who are not actively agitating for a December rate cut (to put it mildly),” said Wall Street Journal chief economics correspondent Nick Timiraos in an X post.
December Rate Cut Odds Fall to 53.6%
The inflation and labor market data blackout from the Labor Department as a result of the government shutdown has also led to uncertainty within the central bank. The latest data showed September’s Consumer Price Index (CPI) inflation rate and unemployment rate at 3% and 4.3%, respectively.
The odds of a 25 bps rate cut in December, which would bring the rate to between 3.50% and 3.75%, sit at 53.6%, down from 62.9% yesterday, 69.6% a week ago, and 95.5% a month ago, according to CME’s FedWatch tool.
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