“Hawk or dove?” The division dominates the Federal Reserve to decide interest rates

With the return of US government agencies to announce their delayed economic data due to Investor expectations have seen a noticeable shift in recent days, as bets on a rate cut have now dropped to a 60% chance that the Federal Reserve will hold its rates in December, after two successive cuts in September and October.
This sudden shift reflects a state of anticipation and confusion gripping Wall Street, awaiting delayed economic data that will reveal the true state of the US economy.

Hawkers or doves?

Decision makers at the US central bank are divided over interest rates. Beth Hammack, Governor of the Federal Reserve in Cleveland, confirms that "It is not clear that monetary policy should do more". Lori Logan from Dallas and Jeffrey Schmid from Kansas City agree with her in calling for caution and monitoring inflation developments.

On the other hand, Stephen Miran comes out in defense of the necessity of cutting rates again, expressing his conviction that costs are still very high. What increases the importance of Miran’s position is his intention to return to the White House as an economic advisor, as he shares the same opinion with President Trump.

Powell and the missing data

In the midst of this controversy, the Chairman of the Federal Reserve, Jerome Powell, seems keen not to give any advance signals. After the October reduction, he explained that the previous measures aimed to "Labor market insurance" from any possible deterioration. But he pointed out that "fog" Data resulting from the government shutdown may require waiting.

The Decisive Week

All eyes are now turning to next week, when a series of economic data will begin to appear for the first time in a month and a half. A new group of decision-makers will also weigh in, most notably Christopher Waller, a well-known advocate of more flexible policies.

This timing will be crucial in determining the direction of The US Central Bank, in a real test of its ability to balance inflation fears and the risks of slowing growth.

The question that awaits an answer: Will December be the month of the third cut…or the beginning of the return of monetary policy to stability? The answer is still ambiguous.

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