Source: Economics Group of Wells Fargo Bank, N.A.Summary
- We expect the FOMC to reduce the fed funds rate by another 25 bps to 3.50%-3.75% at its December 10 meeting. The FOMC will not have the October and November Employment Situation and CPI reports as initially planned, but the latest available data suggest continued softening in labor market conditions and receding inflationary pressures outside of tariffs.
- The FOMC has grown increasingly split over its near-term course of action. Generally speaking, the Board of Governors has a dovish skew, while the regional Fed presidents—who do not all vote—lean more hawkish. Multiple dissents seem likely. While we expect opposition in both directions of the policy decision again, more dissents are likely to be in favor of keeping the policy rate unchanged.