The probability of the Federal Reserve lowering interest rates by 25 basis points in December has risen to 87.6%, but it is not a final decision. The next two data releases this week are the most critical, as they point to the two core pillars of the rate cut decision: employment and inflation.
Will weak employment data (ADP) force the Federal Reserve to act quickly, or will stubborn inflation data (PCE) keep it on the sidelines?
December 3 (Wednesday)
· Event: November ADP Employment Report ("Little Non-Farm")
· Importance: ⭐️⭐️⭐️⭐️⭐️
· Impact: The only private employment data before the December meeting, a core leading indicator of the labor market. An increase of 42,000 is expected; if the data is weak, it will significantly strengthen the urgency for a rate cut.
December 5 (Friday)
· Event: September Core PCE Price Index
· Importance: ⭐️⭐️⭐️⭐️⭐️
· Impact: The inflation indicator that the Federal Reserve pays the most attention to. An annual rate of 2.9% is expected. If it exceeds expectations (like the previous value), it will suppress or delay rate cut expectations.
December 9-10
· Event: Federal Reserve December FOMC Meeting
· Importance: ⭐️⭐️⭐️⭐️⭐️
· Note: Decision on interest rate policy.
💎 Summary
Simply put, you need to remember: the most important inflation data (September PCE) will be released on December 5 (Friday). Together with Wednesday's ADP employment report, it will become the most important clue in the final and most critical "data fog" for the Federal Reserve to assess the economy before the December meeting.
