Fed Navigates Uncertainty as Data Gaps Obscure Rate-Cut Decision
- U.S. Treasury Secretary Bessent urges Fed to continue rate cuts to support growth amid volatile markets and weak labor data. - Delayed September jobs report and 183% October layoff surge cloud Fed's December decision amid inflation concerns. - Market expectations for a 25-basis-point cut dropped to 42.9% as Fed officials split between hawkish caution and dovish relief calls. - Strong Nvidia earnings temporarily eased AI bubble fears but analysts warn of limited capital budgets amid macro risks. - Global
U.S. Treasury Secretary Scott Bessent has called on the Federal Reserve to stay the course with interest rate reductions, stressing that a looser monetary stance is essential for fostering economic expansion and calming markets during turbulent times. His remarks come as investors contend with mixed signals regarding employment, inflation, and the durability of AI-fueled expenditures,
The Fed’s policy outlook has grown more uncertain due to a scarcity of fresh data, especially with the September nonfarm payrolls report delayed until November 20. This release is considered crucial for evaluating the labor market’s strength and will play a key role in the central bank’s deliberations on further rate cuts.
The performance of the AI industry has added another layer of complexity to the Fed’s decision-making.
Global financial markets have also responded to the prevailing uncertainty.
Bessent’s push for ongoing rate reductions is in line with broader fiscal objectives, including support for Trump’s $100 billion “One Big Beautiful Bill,” which is designed to stimulate growth through tax cuts and infrastructure investment.
As the Fed readies for its December gathering,
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