The Federal Reserve was expected to reduce the benchmark short-term interest rate at the next Federal Open Market Committee (FOMC) meeting, which was scheduled to conclude on December 10th. That would mark the third-consecutive quarter-point cut this year, bringing the federal funds rate to a range of 3.50% to 3.75% and closer to what would be considered a neutral rate – that is, one not expected to either stimulate or cool the economy. The central...

The odds of an interest-rate cut at this month’s Federal Open Market Committee (FOMC) meeting continue to gyrate. Recall that after the October FOMC decision, which lowered the federal funds rate to a range of 3.75% to 4.00%, the likelihood of another quarter-point reduction before year’s end was very high. These odds then plummeted on hawkish monetary policy commentary from some Federal Reserve officials and continued worries about inflation, exacerbated by the increased tariffs. However...

The Federal Reserve is walking a tight-rope heading into the December Federal Open Market Committee (FOMC) meeting. That is because recent data, though limited due to the federal government shutdown, have shown some problems on both sides of its dual mandate (more below). Wall Street is still anticipating a quarter-point cut to the benchmark short-term interest rate, despite commentary from Fed Chair Jerome Powell that another reduction before year end is not a foregone conclusion...