Fed rate cut at next meeting in December may be a coin flip

On October 29th, 2025, the Federal Reserve lowered the federal funds rate for the second consecutive time, reducing it by a quarter point to set the target range at 3.75%-4.00%. The next opportunity for a potential rate cut will be at the upcoming Federal Open Market Committee (FOMC) meeting on December 9–10, 2025. Although many investors and economists expect another reduction, Chair Jerome Powell emphasized that it is “not a foregone conclusion,” and recent remarks from other Fed officials reveal differing opinions on whether a cut will happen.

Investors are divided on whether the Federal Reserve will cut interest rates at its next meeting, as uncertainty from missing economic data due to the government shutdown clouds the outlook. Normally, the central bank’s intentions are clearer, but with inflation and labor market data unavailable, disagreement among officials about monetary policy is increasing.

Investors are pegging the odds of a December rate cut at 46%. That means a 54% chance that the Fed will hold steady. A week ago, the odds of a rate cut were implied to be 67%, marking a significant departure from a month ago, when investors were estimating nearly a 95% chance of a cut.

Key employment reports for September and October were not released due to Bureau of Labor Statistics staff being furloughed. Additionally, the September Job Openings and Labor Turnover report was missing. On the inflation side, producer price index reports for both September and October were not published. While the consumer price index for September became available, the release of October’s CPI report was delayed.

The timing for the release of most reports remains uncertain; however, the Bureau of Labor Statistics has stated that the September employment report will be published on November 20. Should the September jobs report indicate significant weakness, there will likely be increased pressure to consider a rate cut in December. Conversely, if data suggest a continuation of the current “low fire, low hire” trend, Chair Powell could reasonably argue for pausing further rate reductions.