Powell admits that a rate cut in December is hard to determine, with officials remaining divided.
The probability of a Federal Reserve rate cut in December remains uncertain, with officials expressing both hawkish and dovish views. This meeting is filled with suspense!
Among the 2025 voting members, five are inclined towards rate cuts, emphasizing the decline in inflation and the policy's room for adjustment, supporting "small and gradual" rate cuts, with Williams, Waller, and Milan being the most proactive. Six members advocate caution, believing that interest rates are already close to neutral and that easing too early could weaken the effect of curbing inflation, especially Schmid and Collins, who explicitly oppose a rate cut in December.
2025 Voting Members, Inclined to Cut Rates (5 votes)
1. New York Fed President and permanent FOMC voting member Williams: The Federal Reserve may still cut rates "in the near term" without jeopardizing its inflation target. (Fed's third-in-command)
2. Fed Governor Waller: A rate cut in December is appropriate, but action in January is more uncertain.
3. Fed Governor Milan: If my vote is decisive, I will support a small rate cut in December. (Previously advocated for a 50 basis point cut at the last two meetings)
4. Fed Governors Bowman and Cook: Did not state a position on rates in November, but are inclined to cut rates.
2025 Voting Members, Inclined to Caution (6 votes)
1. Fed Vice Chair Jefferson: As rates approach neutral levels, policymakers need to act cautiously. (Fed's second-in-command)
2. St. Louis Fed President and 2025 FOMC voting member Musalem: Policy is approaching neutral, room for easing is limited, and caution is needed.
3. Kansas City Fed President and 2025 FOMC voting member Schmid: Further rate cuts could have a lasting impact on inflation. (Opposed rate cuts at the October meeting, supported keeping rates unchanged)
4. Boston Fed President and 2025 FOMC voting member Collins: Current monetary policy is appropriate, skeptical about a December rate cut.
5. Chicago Fed President and 2025 FOMC voting member Goolsbee warns against excessive front-loading of rate cuts: In the medium term, I am not hawkish, I believe rates will fall and can fall, but we must first get through this period.
6. Fed Governor Barr: Did not state a position on rates in November, inclined to keep rates unchanged.
Non-2025 Voting Members
1. San Francisco Fed President and 2027 voting member Daly supports a rate cut in December, stating that labor market conditions are deteriorating.
2. Dallas Fed President and 2026 FOMC voting member Logan calls it difficult to cut rates again in December unless circumstances change.
3. Philadelphia Fed President and 2026 FOMC voting member Harker: "Cautious" about the December rate decision; the rate cuts so far have been appropriate, but each cut sets a higher bar for the next one.
4. Cleveland Fed President and 2026 FOMC voting member Mester: Cutting rates to support the labor market could lead to persistently high inflation and may encourage risk-taking in financial markets. Current rates are almost restrictive, and a restrictive stance must be maintained to curb inflation. (Most hawkish official)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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