Fed December Rate Cut Faces Pushback; Traders Shift to ‘No Cut’ Odds

Fed December rate cut is no longer seen as a given. By late Friday, short‑term interest‑rate futures pointed to a 60% chance the Federal Reserve will hold policy steady at its December 9–10 meeting, a sharp swing from just a day earlier. The repricing followed public remarks from three regional Fed presidents who stressed caution on inflation, even as the central bank’s most dovish voice argued the existing data support another cut.

The shift arrives as U.S. agencies begin planning releases of economic figures that were delayed by the government shutdown. With fresh information set to hit next week—and more Fed officials slated to speak—traders acknowledge the odds around a Fed December rate cut could flip again.

Markets reprice the Fed December rate cut after hawkish signals

• Late Friday, rate futures indicated a 60% probability of no move in December.
• Just 24 hours earlier, odds were about even; in prior weeks, they had leaned heavily toward another cut after back‑to‑back reductions in September and October.
• The swing reflects how contested the December decision has become.

Traders often use the futures market as a real‑time gauge of policy expectations. This week’s repricing suggests investors gave weight to a trio of officials who emphasized patience, even as the broader committee remains divided.

Futures tilt shows a live debate

The change in pricing underscores a point Fed Chair Jerome Powell made after October’s cut: strong, differing views exist on the rate‑setting committee, and a Fed December rate cut was “not to be seen as a foregone conclusion—in fact, far from it.”

Policymaker split sharpens heading into December

Three regional presidents largely repeated earlier hawkish views on Friday, while one governor pressed the case for additional easing.

Hawks see reasons to hold

• Cleveland Fed President Beth Hammack: “It’s not obvious that monetary policy should be doing more right now,” she told the Pittsburgh Economic Club.
• Dallas Fed President Lorie Logan: At an energy conference hosted by the Dallas and Kansas City Fed banks, she said it would be “hard to support another rate cut” in December without convincing evidence that inflation is falling faster than expected or that the labor market is cooling more than gradually.
• Kansas City Fed President Jeffrey Schmid: Speaking at the same event, he said the rationale behind his October dissent still guides him. He argued further cuts won’t fix labor‑market stresses that likely stem from structural factors such as technology and immigration policy, and warned cuts could have “longer‑lasting effects on inflation” as the Fed’s 2% commitment comes into question.

Their collective stance reinforces the possibility that a Fed December rate cut could meet resistance unless incoming data show clear disinflation or a sharper labor‑market slowdown.

A dovish push for easing

• Fed Governor Stephen Miran, in back‑to‑back TV interviews, made the case for another cut. He dissented in October in favor of a bigger reduction than the quarter‑point move the Fed delivered.
• Miran plans to return to his White House economic adviser role when his term ends in January and shares President Donald Trump’s view that interest rates are far too high.

His argument highlights the other side of the ledger: that the data in hand justify more insurance against labor‑market deterioration, keeping a Fed December rate cut on the table.

Powell’s frame: insurance and “data fog”

After the October cut, Powell said the prior moves were intended as insurance against potential worsening in labor‑market conditions. With key releases delayed by the shutdown, he suggested the Fed may need to slow the pace of decisions until the data “fog” clears. That guidance aligns with a wait‑and‑see approach and helps explain why the market has grown more cautious on a Fed December rate cut.

Data delays ease next week; views could shift again

Government statistical agencies are set to resume publishing economic reports for the first time in roughly six weeks. As those numbers arrive—and as more policymakers, including influential and dovish Governor Christopher Waller, share their views—traders say the pricing for a Fed December rate cut could reverse quickly.

The timing matters. With the December 9–10 meeting approaching, each release has the potential to tip the balance of probabilities. For now, the absence of fresh data has allowed the hawkish case to carry more weight in markets.

Why does the decision look tight

• The committee cut rates in both September and October, but several members question doing more without clear evidence of faster disinflation or a deeper labor cooldown.
• Some policymakers see structural pressures—rather than cyclical weakness—behind certain labor‑market cracks, suggesting limited benefit from further cuts.
• Others contend that the current data argue for another reduction, echoing the “insurance” framing from October.

That mix leaves the Fed December rate cut as a coin toss that can swing with each new dataset or speech.

What officials said, in their own words

• Beth Hammack: “It’s not obvious that monetary policy should be doing more right now.”
• Lorie Logan: “As I look to the December meeting, I think it would be hard to support another rate cut unless we were to get convincing evidence that inflation is really coming down faster than my expectations or that we were seeing more than the gradual cooling that we’ve been seeing in the labor market.”
• Jeffrey Schmid: “I do not think further cuts in interest rates will do much to patch over any cracks in the labor market… Cuts could have longer‑lasting effects on inflation as our commitment to our 2 percent objective increasingly comes into question.”
• Stephen Miran: Pressed for another cut and previously dissented in favor of a larger October move; he shares the view that rates are far too high.

Each quote maps to the central tension: whether the bar for a Fed December rate cut has already been met by existing data, or whether caution should prevail until the “fog” lifts.

Traders’ take: Pricing the uncertainty

By late Friday, the market’s probability of no move in December sat at 60%, a notable pivot from the even odds a day earlier and the cut‑leaning stance of prior weeks. Investors acknowledge that the reintroduction of data next week could push those probabilities in either direction.

In that sense, the market is reflecting Powell’s message: the path ahead is conditional, and “far from” pre‑decided.

The road to December 9–10

With just weeks to go, the calendar sets up a compressed window:

• Agencies begin releasing delayed reports next week, ending a month‑and‑a‑half gap.
• More Fed speakers, including Governor Christopher Waller, are expected to weigh in.
• The committee convenes December 9–10 to decide whether a Fed December rate cut is warranted after two consecutive reductions.

Until the data land, officials’ public remarks and market odds will likely continue to ebb and flow.

Conclusion

The case for a Fed December rate cut has weakened in markets after three regional presidents signaled a preference to hold policy steady. Futures now assign a 60% chance of no move, up from roughly even odds a day earlier. Dovish voices—most notably Governor Stephen Miran—still press for another cut, arguing the current data justify additional insurance.

With delayed figures set to return and more policymakers due to speak, the final call may hinge on the next few data points. For now, investors are aligning with Powell’s caution: December is “far from” a foregone conclusion.

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