The Fed is expected to implement a new rate cut of 25 basis points

The Federal Reserve is anticipated to announce a new rate cut of 25 basis points. This decision would follow a similar reduction made in September, bringing borrowing costs to their lowest level since 2022. Markets will closely monitor any indications provided in December, although policymakers are not expected to introduce any significant new elements. The political landscape has become more uncertain due to a government services shutdown, which has delayed the release of key economic indicators. Among the available data, albeit limited, the Consumer Price Index (CPI) has shown a slight increase in overall inflation to 3%, while core inflation has also decelerated to the same level. Additionally, ADP data revealed that the private sector created an average of 14,250 jobs per week during the four weeks ending October 11. An estimate from the Federal Reserve Bank of Chicago suggests that the unemployment rate remained stable at 4.34% in September. Furthermore, market participants anticipate that the Federal Open Market Committee (FOMC) may consider suspending the sale of Treasury securities, with a balance sheet totaling $6.6 trillion.