Top Fed Official Endorses Cautious Approach on December Rate Cut

Top Fed Official Endorses Cautious Approach on December Rate Cut By Vicky Ge Huang

Federal Reserve Vice Chair Philip Jefferson on Friday reinforced the view that a December rate cut remains a close call. A monthly survey from the University of Michigan showed consumers' moods worsened in November amid persistent price increases and an extended government shutdown. The Senate cleared a key hurdle late Sunday toward ending the record-long impasse, after Democrats provided just enough votes to advance a measure to that effect. But till then, official data will continue to be delayed, including key inflation data for October. Meanwhile, New York Fed President John Williams hinted that the central bank could soon start expanding its asset portfolio again. Elsewhere, the Reserve Bank of Australia warned that the path to more rate cuts could be narrow given elevated capacity utilization and an outlook that includes high inflation well into next year. And the Bank of Japan's policy board has signaled that the next rate hike is nearing, according to the central bank's latest summary of opinions.

Top News Top Fed Official Endorses Cautious Approach on December Rate Cut

Federal Reserve Vice Chair Philip Jefferson said he backed last week's cut, because the risks of weaker labor-market conditions have increased . That move leaves rates closer to but still above a neutral level that neither restricts nor stimulates economic activity, he said.

"Given this, it makes sense to proceed slowly as we approach the neutral rate," Jefferson said.

Consumer Sentiment Falls Toward Record-Low Levels

The Michigan survey's headline index fell to 50.3 in November, from 53.6 last month , based on preliminary November responses. Analysts polled by The Wall Street Journal were expecting a milder decline in the index, to 53.

Senate Clears Key Hurdle Toward Ending Government Shutdown

The Senate late Sunday cleared a critical procedural hurdle

in its drive to end the record-long government shutdown, after Democrats provided enough votes to advance a measure designed to end the over monthlong impasse.

Fed's Williams Hints at Resuming Growth in Balance Sheet

The Federal Reserve could soon start expanding its asset portfolio again , New York Fed President John Williams hinted in a speech Friday. Fed officials voted last week to stop shrinking their $6.6 trillion asset portfolio from the start of December. That move is meant to stop too much electronic cash, known as bank reserves, from draining out of the financial system.

Bank of Japan Summary of Opinions Show Next Rate-Hike Nearing

The Bank of Japan's policy board has signaled that the next interest-rate increase may be coming soon , according to its latest summary of opinions, with members keeping a particular eye on domestic wage trends.

Bank of Japan policy board member Junko Nakagawa reaffirmed the bank's stance of seeking further interest-rate hikes but also stressed the necessity of moving carefully given lingering uncertainties. "If its outlook for economic activity and prices is realized, the bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation," she said in a speech Monday. (Dow Jones Newswires) The Grim Reality Is That the RBA Is Done Cutting Rates By James Glynn

The grim realization that is now settling over Australian money markets and the many millions of home buyers battling enormous mortgage debts, is that the Reserve Bank of Australia is almost assuredly done lowering interest rates, bringing to an end an exceedingly shallow easing cycle of just 75 basis points. Read more .

Also read: RBA Fears Capacity Constraints Could Limit Scope for Rate Cuts

Economy Feeling Great About the Economy? You Must Own Stocks

Many Americans who own stocks are feeling good about their finances , with a market that's continually shrugged off economic concerns and pushed major indexes to record highs.

Trump Suggests $2,000 Payouts to Americans as He Defends Tariffs

President Trump suggested tariff revenue could be used to fund payments of at least $2,000

to most Americans.

Trump's Tax Cuts Are Exposing Companies to Biden's Tax Hike

Large companies are running into a problem as they try to claim some of the tax cuts that the Republican Congress passed this summer: They can't escape the corporate tax increase

that Democrats passed three years ago.

Key Developments Around the World Canada Unemployment Rate Falls to 6.9% in October

Canada saw another month of unexpectedly strong hiring

in October, pulling the jobless rate down for the first time in four months and offering an early hint the struggling economy is steadying.

Europe's Economic Recovery Hopes Hang on Scarred Consumers

Europe's economy appears to have survived a jump in U.S. tariffs

without entering recession, but if it is to stage a significant recovery households will have to put half a decade of trauma behind them.

China's Deflationary Pressures Eased in October

China's downward price pressures further eased in October , in part thanks to the boost from a weeklong holiday as well as Beijing's continuing efforts to curb excess capacity in some key sectors.

China's Auto Sales Resume Downtrend as Demand Slows

Forward Guidance Monday (all times ET)

10 a.m.: Employment Trends Index

6 p.m.: U.S. and China tariff changes take effect

6 p.m.: U.S. President Donald Trump hosts Syrian President Ahmad al-Sharaa at the White House

Tuesday

6 a.m.: NFIB Index of Small Business Optimism

9 a.m.: Johnson Redbook Retail Sales Index

Research Dollar Faces Sharp Falls From Fed Independence Risks

The dollar is likely to come under significant pressure in the coming year as the Federal Reserve could cut interest rates more sharply than expected due to political pressure, Commerzbank's Thu Lan Nguyen says in a note. The market is underestimating the risk of the U.S. government undermining the Fed's independence, she says. President Trump has repeatedly called for lower rates and his actions leave "no doubt" that he wants to influence monetary policy. Fed Chair Jerome Powell's term ends next spring and Trump could replace him with someone who favors lower rates. Moreover, inflation expectations have fallen recently as trade policy risks recede. - Renae Dyer

Basis Points Italy's biggest pasta exporters say import and antidumping duties totaling 107% on their pasta brands will make doing business in America too costly

and are preparing to pull out of U.S. stores as soon as January. New York state on Friday approved a crucial permit

for a natural gas pipeline project proposed by energy company Williams. What's worse for car insurers: a trade war or a price war? Consumers might like the answer, but investors probably won't . About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to [vicky.huang@wsj.com].

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

November 10, 2025 07:25 ET (12:25 GMT)