"The decision is unlikely to be unanimous, with dissent anticipated from both hawkish and dovish members. Should four or more officials break ranks, it would mark the largest split since 1992," Reid et al said. "Beyond the headline move, the tone of Chair Powell's press conference and the accompanying statement will be critical. We expect Powell to emphasize that the hurdle for further cuts in early 2026 is high, signaling a near-term pause. This guidance will be key to maintaining credibility ahead of likely softer labor market data due later in December."
"The market will get moving again once it digests Powell's statement and his remarks to the press. Recently, Fed members have suggested they are more worried about weakness in the labor market than they are about rising inflation-which is why that rate cut feels locked in. Any change of tone could move Wall Street into risk-off mode."
The S&P 500 sits just over 6,870, a few points below its all-time high of 6,890.89, with futures flat ahead of the opening bell. Traders are focused on Wednesday's FOMC, where a 0.25% rate cut is widely expected and the CME FedWatch shows an 87.4% probability. VIX volatility has fallen 10.33% over the last five sessions. Asian markets were mostly up and Europe was flat. Declining consumer confidence and Fed concern about labor-market weakness are pushing policy toward easing. Market direction will depend on Chair Powell's statement and his press remarks; any change of tone could trigger risk-off moves.
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