Once again, bad news. It seems difficult to expect the Americans to loosen monetary policy.
"Voice of the Federal Reserve": Powell faces a critical battle, with half of his colleagues opposing rate cuts.
On December 9, Nick Timiraos, a reporter for the Wall Street Journal known as the "Voice of the Federal Reserve," stated that Federal Reserve officials will hold their last two-day meeting of the year on Tuesday local time, where up to half of the members may oppose rate cuts. However, the final decision still rests with Chairman Powell, who, despite facing rare opposition, seems prepared to push for a rate cut.
The core focus of this week's meeting is whether Powell can build enough consensus to reduce dissenting votes. A potential path to achieve this goal is to lower rates by 25 basis points to a range of 3.5% to 3.75%, followed by modifying the post-meeting statement to signal a higher threshold for subsequent easing.
Among the 12 voting members of the Federal Reserve's policy committee, as many as 5, along with 10 of the total 19 members, have publicly stated in speeches or interviews that they do not see strong reasons for a rate cut. Only 1 member formally voted against the rate cut decision in October (another board member held an opposing view, advocating for a larger cut).
The delayed September non-farm payroll report released last month showed employment growth exceeded expectations, but the unemployment rate rose to 4.4% (the highest level since the end of 2021), and August data was revised to negative growth. The key question is whether the slowdown in job growth reflects weak labor demand (which supports a rate cut) or is due to a contraction in labor supply caused by reduced immigration (which opposes a rate cut). $BNB
