Fed Seen Poised to Cut Rates this Month, Debate 2025 Pause

• Federal Reserve officials appear on track to cut interest rates this month after data showed the U.S. labour market remained strong but continued to cool in November, even as debate emerged over a possible pause to rate cuts in the new year.
• U.S. employers added 227,000 jobs last month, a rebound from a hurricane-impacted slowdown in October, but the unemployment rate ticked up to 4.2%, the Labour Department's monthly employment report showed on Friday.
• A number of Fed policymakers speaking on Friday said they saw rates continuing to come down while injecting a note of caution on the pace. San Francisco Fed President Mary Daly said the fresh figures show the labor market is in a good position.
• San Francisco Fed President Mary Daly said the fresh figures show the labour market is in a good position. And while she indicated no discomfort with another rate cut this month, she said that once the policy rate is closer to where it will settle, she would take "a more thoughtful and cautious approach" on further rate cuts. Daly has previously said she views 3% as where short-term borrowing costs may need to end up. Those projections will be updated at the December meeting.
• A quarter-percentage-point reduction this month would bring the Fed's policy rate to the 4.25%-4.50% range, a full percentage point below where it was in September when the central bank began its easing cycle. On Wednesday, Fed Chair Jerome Powell repeated his prior comments that the central bank could be careful in managing the endgame of its roughly three-year fight against inflation. Powell's caution may come more into play next year, with many analysts expecting the Fed to pause the easing after delivering a cut on Dec. 18.

(Source: Reuters)