11/24/25 REcap: A December Rate Cut Is Back On the Table

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The September Labor Report Is Finally Published

The delayed September jobs report showed 119,000 jobs added (nearly double the amount expected), but the revisions to prior months tell a very different story. August jobs data was revised sharply lower into negative territory, and July was revised down as well — continuing a multi-month trend of downward adjustments that point to a cooling labor market. Because this report was assembled after a long data blackout, and because the typical month-to-month survey inputs weren’t available during the shutdown, it’s widely expected that September’s number will be revised lower once the next batch of data is released.

The next batch of labor data won’t arrive until December 16, when the October and November employment reports are published together. With the November release pushed back by the Thanksgiving schedule, the Fed won’t see either of those datasets until after its December 9–10 meeting. That means the only labor reading the Fed has going into the meeting is September — a number that appears stronger on the surface but is very likely overstated and due for downward revision.

For a Fed that's been clear that they don't want to make a move without a clear picture of the market, this report certainly doesn't help the chances of a cut.

What is the Fed saying about a December Rate Cut?

The Fed’s will-they-won’t-they dance on rate cuts is giving me whiplash!

Last week we saw chances of a Fed rate cut jump from 45% to 79%  thanks to Fed officials become more vocal over the need for a rate cut.

The strongest pro-cut signal came from New York Fed President John Williams, who said he believes the Fed can cut rates “in the near term” because labor market weakness is now a bigger threat than inflation. Markets took “near term” to mean December, and odds of a rate cut immediately jumped and sparked a rally in both stocks and bonds.

Fed Governor Christopher Waller also aligned himself with that view, joining the camp that believes inflation progress and a softer labor market justify discussing cuts sooner rather than later. His remarks helped push expectations higher that the December meeting could bring the first move lower.

On the other side, Boston Fed President Susan Collins wants to pause in December. She’s worried that inflation is still running above the Fed’s 2% target and doesn’t believe the labor market has deteriorated enough to justify easing. She notes that unemployment has risen from 3.4% to 4.44% over the past 18 months — and three straight monthly increases — but still sees the labor market as too strong to cut.

Based on what we know today, 4 members of the Fed want to cut in December, 3 want to pause and 5 are unknown. The more likely a rate cut, the more we'll see rates fall in the coming weeks.