"Odds for a December cut to interest rates at the Federal Open Market Committee's (FOMC) final meeting of the year are fading fast, despite hopes all year for one last reduction. At the time of writing, CME's FedWatch barometer shows a 32% probability of a 25bps cut next month. That's compared to a 98.9% conviction of a cut a month ago. The general consensus is now for the Fed to keep rates hold, with the base rate sitting at 3.75% to 4%."
"Fed members were split on inflation, which should be at 2%, but currently sits at 3%. The notes described how several members were comfortable with current levels, arguing it's 'close' to target. 'Close' isn't close enough for others, the report adds: 'Many participants, however, remarked that overall inflation had been above target for some time and had shown little sign of returning sustainably to the 2% objective in a timely manner.'"
Market expectations for a December Fed rate cut have fallen sharply, with CME's FedWatch showing a 32% probability for a 25 basis-point reduction compared with 98.9% a month earlier. The Federal Reserve's policy rate currently sits at 3.75%–4%, and consensus now favors holding rates in December. The White House and President Trump are pressing for substantial cuts in 2025, blaming delayed action for housing pressures. October FOMC minutes reveal a divided committee on inflation: some viewed a roughly 3% inflation rate as 'close' to target, while many warned inflation has remained above 2% and shows little sign of returning sustainably. Participants agreed monetary policy is not on a preset course.
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