Next week's macro outlook: Fed rate cut is a done deal, the hawk-dove debate is in the spotlight

According to Jinshi News, the last Federal Reserve meeting of the year will take place next week, with the interest rate decision announced at 3:00 AM (UTC+8) on Thursday, followed by a monetary policy press conference by Fed Chairman Powell at 3:30 AM (UTC+8).

According to CME FedWatch, the probability of a 25 basis point rate cut next week is 84%. The upcoming Fed meeting is expected to be one of the most controversial in recent years, with investors focusing on the divergence among policymakers regarding the prospects for rate cuts, as well as signals from Fed Chairman Powell about the future direction of policy. Among the 12 voting members of the Federal Open Market Committee (FOMC), 5 have expressed opposition or skepticism towards further easing of monetary policy, while 3 members of the board support a rate cut. Since 2019, there has not been a meeting where three or more dissenting votes were cast, and the divisions have drawn close attention to the dissenters. Important macro data and events are as follows:

Tuesday:

The Reserve Bank of Australia announces its interest rate decision, and RBA Governor Lowe holds a monetary policy press conference;

Wednesday:

U.S. third-quarter labor cost index quarter-on-quarter; Bank of Canada announces its interest rate decision;

Thursday:

The Fed FOMC announces its interest rate decision and economic projections summary, and Fed Chairman Powell holds a monetary policy press conference;

U.S. initial jobless claims for the week ending December 6;

Friday:

The Fed releases data on U.S. household financial health from the Q3 2025 flow of funds report;

2026 FOMC voter, Philadelphia Fed President Harker speaks on economic outlook;

2026 FOMC voter, Cleveland Fed President Mester speaks;

Chicago Fed President Goolsbee participates in a moderator dialogue before the Chicago Fed's 39th Annual Economic Outlook Symposium.

Market Closure Reminder: On Wednesday, the New York Stock Exchange will close early at 2:00 AM Beijing time; on Thursday, U.S. stocks, stock markets in several European countries, South Korean stocks, and Australian stocks will be closed. Trading in precious metals, U.S. oil, foreign exchange, and stock index futures contracts under the CME, as well as Brent crude oil futures contracts under the ICE, will be suspended all day.