Missing Data Throw Fed Rate Cuts Into Doubt

Missing Data Throw Fed Rate Cuts Into Doubt By Vicky Ge Huang

Relief over the end of the government shutdown has given way to concerns over whether the Federal Reserve will slow its interest-rate cuts. Futures pricing shows a roughly 50% chance the central bank eases policy next month, down from 67% a week ago and 95% a month ago, according to CME data. On the data front, there was no consumer-price index out yesterday-as originally scheduled before the government shutdown-but one of the private alternatives that scrapes millions of prices from across the web suggests inflation remained relatively benign in October. Meanwhile, a top White House official said an October jobs report will happen but it isn't expected to include a measure of the unemployment rate.

Top News Missing Data Throw Federal Reserve Interest-Rate Cuts Into Doubt

When faced with a particularly puzzling case and not much evidence to go on, Sherlock Holmes once said, "It is a capital mistake to theorize before one has data." Investors should heed that advice when deciding whether to pursue a market rotation, Barron's reports.

Amid celebrations over the end of the U.S. government shutdown on Wednesday, the White House said October's inflation and jobs reports will "likely never" be released. Although that's yet to be confirmed by the agencies responsible, it would leave a significant gap in the data available to the Federal Reserve ahead of its December meeting and allow doubt to creep in about the central bank's rate-cutting path.

Nervousness is already evident. Boston Fed President Susan Collins-a voting member of the Fed's rate-setting committee this year-said there should be a "high bar" for further easing. That contributed to market pricing of a December reduction falling to 58% according to the CME FedWatch tool, down from more than 95% a month ago.

Alternative Measure of October Inflation Finds It 'Remains Firm but Not Frightening'

October Jobs Report Will Come, but It Won't Include Unemployment Rate, Hassett Says

Mary Daly Calls Fed Communication on Balance Sheet Essential

San Francisco Fed President Mary Daly acknowledges that the Fed's balance sheet incurs a lot of criticism. That makes it all the more important that the Fed communicate clearly about its actions and intentions regarding its bond holdings, she said in a speech in Dublin. "It's often unclear to the public why [central banks' balance sheets] are changing," Daly said. "This makes communication essential, acknowledging the multiple uses and, when possible, identifying how each is driving balance-sheet growth." Her comments came as the Fed is navigating the end of its three-year balance-sheet runoff program, and facing the potential need to begin buying bonds again not to stimulate the economy, but to keep the supply of bank reserves in line with the financial system's needs. - Matt Grossman

Repo-Market Relationships Could Fuel Reluctance to Use Fed's SRF

The Fed's standing repo facility hasn't been 100% effective at pinning repo rates inside the Fed's targeted overnight range. Fed official Roberto Perli said Wednesday that some banks might be reluctant to use the SRF even when it makes economic sense, because they want to maintain good relations with their trading counterparties at money-market funds and don't want to spurn them to trade with the Fed instead. "Dealers value the stable funding flows that money-market funds provide, and if the added cost of borrowing from a money-market fund at a somewhat elevated rate is only modest, they may prefer to absorb that cost," Perli says. If repo spreads stay elevated for longer, more banks would most likely eventually turn to the SRF instead, Perli said. - Matt Grossman

Economy U.S. to Cut Tariffs on Bananas, Coffee and Other Goods From Four Countries

The U.S. plans to eliminate tariffs

on bananas, coffee, beef and certain apparel and textile products under framework agreements with four Latin American nations, a senior administration official told reporters Thursday.

China Registers Worst Investment Decline in Years as Slowdown Continues

Signs of weakness in China's economy stretched into October, with one measure of investment notching the sharpest slowdown in years .

South Korea to Expand Support for Tariff-Hit Auto Industry

South Korea plans to expand policy support

for its auto industry in the wake of a trade deal struck between Seoul and Washington.

EU Exports to U.S. Jump After Trade Deal

European Union goods exports to the U.S. rebounded in September , reflecting the easing of uncertainty surrounding trade after a transatlantic deal on tariffs was agreed in the summer.

U.K. Assets Fall on Prospect of U-Turn on Government's Income Tax Hike Plans

Sterling, U.K. government bonds and equities sold off on fresh concerns about fiscal sustainability

ahead of the Nov. 26 budget after the FT reported that the Labour government has dropped plans to raise income taxes.

Forward Guidance Friday (all times ET)

5 a.m.: EU third-quarter GDP flash estimate

10 a.m.: Manufacturing & Trade: Inventories & Sales

Monday

8:30 a.m.: Empire State Manufacturing Survey

Research Uncertain Economy May Lead to Fewer Holiday Decorations, Gifts

There may be a little less holiday cheer this year, as financial fear is leading 28% of Americans to say they will cut their decorating budgets this year, Redfin says, with 26% reining in gift spending. Many people are choosing to spend cautiously amid economic uncertainty. More than half of those who are spending less on decorations this year say it's because they're trying to save money, while 44% cite economic uncertainty. Among those spending money on holiday decorations or gifts this year, roughly one-quarter are shelling out the same amount as they are on their monthly mortgage or rent payment on decorations. - Chris Wack

Basis Points U.S. crude oil inventories increased more than expected

last week as U.S. production hit a record high and exports fell, according to data released Thursday by the U.S. Energy Information Administration. President Trump's plan to allow oil drilling off California's coast is running into a stark reality : in the Golden State, offshore drilling is political poison, even for the president's Republican allies. Employers have a warning for the Class of 2026: Next spring's graduate-hiring market is likely to be even worse than this year's . 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 14, 2025 07:51 ET (12:51 GMT)