A growing number of Federal Reserve policymakers are signaling reluctance to push ahead with further rate cuts this year, citing persistent inflation pressures and mixed labor-market data, Reuters reports. The shift comes as short-term futures now price in only a 44.5% chance of another reduction when the Federal Open Market Committee meets on 9-10 December, according to CMEFedWatch.

The perceived likelihood that the Fed will cut is down more than 20 chance points from the week starting 7 November, which had pencilled in a 66.9% likelihood. But roll clocks back a month, and the probability of a cut was put at 94.2%.

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REMEMBER- The Fed has already delivered two 25 bps cuts this year in September and October, bringing the target range to 3.75-4.00% as Chair Jerome Powell attempts to steer between showing growth and inflation still running near 3%. Powell noted after the October cut that another move in December was “far from” assured, particularly given the delay in official data releases caused by the US government shutdown.

Boston Fed’s Susan Collins warned she sees a “relatively high bar” for additional easing absent “notable labor-market deterioration.” Minneapolis Fed’s Neel Kashkari said inflation remains “too high,” adding that while some parts of the US economy are performing well, “some sectors of the labor market look like they’re under pressure.”

Many Fed officials have changed their tone quite dramatically in the last few weeks, including San Francisco Fed President Mary Daly, who said that it was “premature” to decide on another move four weeks ahead of the next policy meeting — marking a shift in stance from her vocal support of rate cuts previously.

Complicating matters is the lack of official data to inform their decisions, with the government shutdown having delayed the release of key economic data. But even with the shutdown now over, inflation and jobs data for October will “likely never” be released, White House Press Secretary Karoline Leavitt told reporters on Wednesday. Leavitt characteristically blamed Democrats and said that the absence of data will leave “our policy makers at the Fed flying blind at a critical period.”

EGX30

40,191

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USD (CBE)

Buy 47.12

Sell 47.25

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THE CLOSING BELL-

The EGX30 fell 0.1% at Thursday’s close on turnover of EGP 7.3 bn (50.1% above the 90-day average). Local investors were the sole net buyers. The index is up 35.1% YTD.

In the green: Misr Cement (+11.1%), Telecom Egypt (+6.4%), and E-finance (+3.4%).

In the red: Beltone Holding (-4.2%), Arabian Cement (-3.7%), and Juhayna (-3.0%).

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