The probability of the US Federal Reserve implementing a quarter-point rate cut at its December meeting has decreased to 65.3 per cent, as of late Monday afternoon in New York. This figure is consistent with the close of trading last week but significantly lower than the 94.4 per cent recorded a week prior, leading up to the Fed’s most recent meeting.
Federal Reserve chairman Jerome Powell has indicated that a December rate cut is not guaranteed, a stance echoed by other policymakers in recent speeches. Federal Reserve governor Lisa Cook stated that all meetings, including the December one, are open for discussion, emphasising that policy is not predetermined and risks to the dual mandate are elevated. Similarly, Federal Reserve Bank of San Francisco president Mary Daly advised keeping an open mind regarding the possibility of another interest rate cut in December.
However, Federal Reserve Bank of Chicago president Austan Goolsbee expressed caution, stating his uncertainty about the December meeting. Goolsbee voiced concerns about inflation, noting it has remained above the target for an extended period and is trending in the wrong direction. Meanwhile, Federal Reserve governor Stephen Miran reiterated his call for lower rates, arguing that the Fed’s current policy is too restrictive.
