Despite the Federal Reserve’s potential interest rate cut, Chairman Jerome Powell is encountering difficulties in signaling further easing prospects for the coming month. The growing divide between hawkish and dovish Fed officials has made this week’s central bank meeting particularly challenging. Wall Street expects a more hawkish approach to the rate cut this time, suggesting Powell may avoid indicating additional cuts in January to appease the hawkish members, especially after a dovish stance earlier this month.
Bank of America analysts note that Powell faces an unusually divided committee and anticipate he will adopt a hawkish tone alongside any rate cut announcement, similar to October. However, Powell has repeatedly emphasized that policymakers have no predetermined path and that rate changes will depend on upcoming economic data. Bank of America also doubts that securing a “hawkish rate cut” will be easy for Powell, given that key economic data releases—some delayed due to government shutdowns—are scheduled between meetings.
Similarly, JPMorgan’s chief U.S. economist Michael Feroli believes Powell will stress that interest rates are nearing a neutral level following this week’s cut, with further easing contingent on significant labor market deterioration rather than risk management concerns. The Federal Reserve’s interest rate policy deeply influences the U.S. economy, directly affecting investment, borrowing costs, and consumer spending. Market attention remains fixed on Powell’s speech and future rate strategy, as these decisions could shape the direction of global financial markets.
Source: binance
