Analysis: Fed Rate Cut Almost a Certainty, Market Focuses on Voting Divisions and Powell's Language

December 8th — This week’s Federal Reserve interest rate meeting is shaping up to be one of the most contentious in recent years. Investors are closely watching for how sharply policymakers disagree on rate cuts and what signals Chair Jerome Powell will send about the central bank’s future policy path. Asset manager Janus Henderson argues that, over the long term, the December meeting won’t have a meaningful impact on markets. While there could be short-term volatility, actions taken in the first half of 2026 will matter more than those in December. Trust company Wilmington Trust says markets have largely priced in the Fed’s rate-cut moves already; the real key lies in the central bank’s policy guidance. They expect the Fed to remain highly cautious, stressing that policy will depend on incoming economic data. Some observers note the market may be overestimating the odds of a Fed rate cut, and are more focused on Powell’s remarks and how close the policy vote will be. Nomura economists point out that nothing is set in stone right now, and markets are underestimating the risk the Fed could hold off on rate cuts in December. A key question will be how many dissenting votes emerge if the Fed does decide to cut rates. With four regional Fed presidents rotating into voting roles, their positions will reveal how much independence they intend to exercise and how much pressure they could put on the central bank’s decision-making. (Jinshi)