The Fed Expected to Announce a Rate Cut in December

The Federal Reserve is expected to make a decision on a rate cut in December, coinciding with evident signs of a rapid cooling in the labor market. This comes as monetary policymakers continue to operate without several key government data releases, which have been delayed or suspended due to a shutdown. Markets will also closely examine the updated dot plot and new interest rate projections from Fed officials for 2026. These projections are likely to highlight ongoing divisions within the institution regarding the need for further monetary easing in the face of still persistent inflation. In September, the Fed had only anticipated one rate cut in 2026. However, traders are currently expecting approximately two additional quarter-point cuts next year, likely in June and September.