Gullshan Desk: A well-known figure receives a lot of attention from businesses, investors, and economic officials at the start of each new month.
Nine days before the central bank’s final meeting of 2025, Fed Chairman Jerome Powell will address a panel at Stanford University on Monday. The December meeting has become a critical one with several Fed members voicing varied views of late on whether another cut in interest rates is necessary.
At both its September and October meetings, the Fed decreased interest rates by a quarter point, but Powell stated following the most recent meeting that a December cut was not certain. Two of the 12 voting members of the monetary policy committee dissented, with one desiring a bigger decrease and the other preferring no change.
There are legitimate arguments for a cut and against it. The labor market has softened, but whether it is weakening further remains unclear. The delayed September jobs data released on Nov. 20 showed an increase of 119,000 jobs, but that is now dated information.
Inflation, at 3% annually measured by the consumer price index, is significantly above the Fed’s 2% annual target. The import tariffs that created so much controversy in April are no longer thought to pose as much of a danger to international trade. And economic growth held up strongly in the third quarter.
Economist Hugh Johnson, a longtime Fed watcher, stated, “Like most observers, we anticipate that the Fed will reduce interest rates at this month’s meeting.” The twelve members of the Federal Open Market Committee, which determines interest rates, are likely to cast dissenting votes in this close vote. “Of the two main risks they face, the risk of inflation rising noticeably higher seems less urgent than further deterioration in labor market conditions.”
The Labor Department’s monthly jobs report for November would normally be released, but it isn’t until December 16. On Wednesday, ADP, a payroll company in the private sector, will release its monthly employer hiring survey.
As for inflation, the government will issue delayed September data on Friday for the personal consumption expenditures price index, a number that officials at the Fed examine closely. The University of Michigan’s December consumer mood index will also be released on that day.
Concerns about rising costs and dwindling employment opportunities have been expressed by Americans. But they have kept spending, sucking down their savings and expanding their usage of credit.
Adobe revealed over the weekend that Black Friday spending touched a record $11.8 billion, up 9.1% year over year and over forecast. According to data from the Mastercard Economics Institute, Black Friday sales increased by 10.4% over the previous year. Spending on garments and jewelry were the top categories with people also spending on restaurants.
