「Fed Whispers」: Powell Gears Up for Battle, Half of Colleagues Oppose Rate Cut
BlockBeats News, December 9th, Wall Street Journal reporter Nick Timiraos, known as the "Fed Whisperer," wrote that Federal Reserve officials will hold their final two-day policy meeting of the year on Tuesday. It is possible that as many as half of the members in the meeting room may not support a rate cut. However, the ultimate decision still lies with Chairman Powell. Despite facing rare dissents, he appears to be prepared to push for a rate cut.
The key focus of this week's meeting is whether Powell can gather enough consensus to reduce dissenting votes. One possible path to achieve this goal is to cut the interest rate by 25 basis points to a range of 3.5% to 3.75%, and then signal a higher threshold for future easing through a post-meeting statement revision.
As many as 5 of the 12 voting members of the Federal Reserve's policy committee and 10 of the total 19 members have stated in speeches or public interviews that they have not seen strong reasons for a rate cut. Only one member officially dissented in the October rate cut decision (another board member held an opposing view but advocated for a larger rate cut).
The delayed September nonfarm payrolls report released last month showed stronger-than-expected job growth, but the unemployment rate rose to 4.4% (the highest level since the end of 2021), and the August data was revised down to negative growth. The key question is whether the slowdown in job growth reflects weak labor demand (which supports a rate cut) or a contraction in labor supply due to reduced immigration (which opposes a rate cut).
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