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Wednesday Nov 19 2025 00:00
2 min
This week, market participants will be keenly watching the release of the Federal Open Market Committee (FOMC) meeting minutes, which are expected to shed light on the extent of the divergence among policymakers regarding a potential interest rate cut in December, amid mixed views on the matter.
However, UBS believes that the "totality of data" released before the December meeting is unlikely to shake the broad support for a third rate cut this year.
“The October FOMC minutes should illustrate the extent of disagreement (among members) over near-term monetary policy decisions… While the October minutes will further reveal dissension within the Committee, we continue to expect the bias to cut rates in December will remain intact. We similarly believe that the totality of data to be released by then will not change that view, and near-term news has not been encouraging,” UBS economists stated in a recent report.
While some officials, such as Atlanta Fed President Raphael Bostic and Kansas City Fed President Esther George, have voiced concerns about inflation or hinted at support for holding rates steady, UBS believes a slight majority on the committee still favors further easing.
Bostic stated in a recent speech: “I was comfortable with the first two rate cuts. For the next one, we’ve got to go step by step. I want to be driven by the data on what is the most appropriate policy.” George, who dissented against the Fed's October rate cut decision, noted uncertainty about the effectiveness of another rate cut in boosting the labor market, arguing that it's being weighed down by policy uncertainty and tightened immigration policies, which are limiting labor supply.
“I don’t think a further rate cut is going to do much to fill any fissures in the labor market – those pressures are more likely coming from structural changes in technology and immigration policy,” George said.
These views clash with those of other, more dovish FOMC members, particularly Governor Lael Brainard, who has consistently called for another 50 basis point rate cut in December.
A lack of data, following the longest government shutdown in U.S. history, is also unlikely to help FOMC voting members reach a consensus.
However, UBS believes the data the Fed will have access to by then may show the economy faces continued downside risks.
“Holiday hiring reports have been consistently weak, and layoff announcements have been increasing… Downside risks to the economy have not been vanquished,” UBS stated.
Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.
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