3 Things to Know:
- Rates hit multi-month highs. Rates climbed ~20 basis points to start December, reaching the highest levels since August, and remained around those levels throughout the rest of the month.
- Markets expect less rate cuts. Leading up to the FOMC meeting, markets repriced expectations for Fed rate cuts in 2026, fueled by strong labor and in-line PCE inflation data. Futures markets now see one or two 25 basis points cuts in 2026, vs. two or three at the start of December.
- Fed division grows. The FOMC delivered a 25 basis point rate cut in December, but the decision featured three dissenters, the most since 2019. Powell emphasized that the cut was a “close call” and didn’t offer much clarity on the road forward.
Explore More:
- Bank of Japan Rate Hike (+6 bps)
- Early December Data (+17 bps)
- December FOMC Meeting (-4 bps)
- November Labor Data (-2 bps)
- November CPI (-3 bps)
- Late December Data
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