It’s looking increasingly likely that Jerome Powell’s Christmas gift to markets will be an economic lump of coal, rather than what’s on Wall Street’s wish list. Odds for a December cut to interest rates at the Federal Open Market Committee’s final meeting of the year are fading fast, despite hopes all year for one last reduction. At the time of writing, the CME FedWatch barometer shows a 32% probability of a 25-basis-point cut next month. That’s compared with the 98.9% conviction of a cut a month ago.
The general consensus is now for the Fed to keep rates as is, with the base rate sitting at 3.75% to 4%. This will likely infuriate the White House, which has been pushing throughout 2025 for significant reductions—with President Trump blaming “Too Late Powell” for a housing crisis in the U.S.
