The latest news regarding Federal Reserve Chairman Jerome Powell and the Fed's policy meetings centers on the uncertainty surrounding a potential interest rate cut in December and the impact of missing economic data due to the recent US government shutdown.
Here's a breakdown of the key points:
1. December Rate Cut Probability is Decreasing
Latest Policy Meeting: The Federal Open Market Committee (FOMC) held its last two-day policy meeting on October 28-29, 2025, and announced a 25 basis point interest rate cut, bringing the target range to 3.75%-4.00%.
Powell's Caution: Following that meeting, Chair Powell cautioned that a rate cut in December was "far from guaranteed" or "not a foregone conclusion," citing signs that the job market remained firm and noting the lack of economic data due to the shutdown.
Shifting Expectations: Following solid, delayed jobs data for September, many economists now expect the Fed to hold rates unchanged at the next meeting on December 9-10, 2025. Probability forecasts for a cut have dropped significantly.
2. Missing Economic Data is a Major Challenge
Data Scrapped: The US government shutdown caused the cancellation of official October inflation (CPI) and jobs figures (unemployment rate will never be known).
Impact on Fed: This lack of two major economic indicators leaves the Federal Reserve effectively "driving in the fog"—a phrase Powell reportedly used—ahead of its December policy decision. The Fed will have to make its decision without a key assessment of October's inflation and labor market health.
3. Other Key Decisions and Outlook
Ending Balance Sheet Reduction: The Fed announced its plan to conclude the reduction of its aggregate securities holdings (Quantitative Tightening) on December 1, 2025.
Next Meeting: The next FOMC meeting is scheduled for December 9-10, 2025, where they will release a new Summary of Economic Projections and the "dot plot" (indicating policymakers' future rate expectations). #PowellSpeech #USStocksForecast2026 #CPIWatch #TrumpTariffs