"What was once seen as a near-certain cut in interest rates next month now looks more like a coin flip as Federal Reserve officials sharply disagree over the economy's health and whether stubborn inflation or weak hiring represent a bigger threat. In several speeches in the past week, some policymakers have registered greater concern over persistent inflation in an echo of the "affordability" concerns that played a large role in elections earlier this month."
"At the same time, another camp is much more concerned about meager hiring and the threat that the "low-hire, low-fire" job market could worsen into one where layoffs become more widespread. The turmoil on the Fed's 19-member interest-rate setting committee reflects a deeply uncertain economic outlook brought about by multiple factors, including tariffs, artificial intelligence, and changes in immigration and tax policies."
A once near-certain rate cut now appears like a coin flip as Fed officials sharply disagree over whether stubborn inflation or weak hiring poses the larger threat. Policymakers expressed greater concern about persistent inflation, echoing affordability worries that influenced recent elections. Another group highlighted meager hiring and the risk that a 'low-hire, low-fire' labor market could deteriorate into broader layoffs. The Fed's 19-member committee faces turmoil amid uncertainty from tariffs, artificial intelligence, immigration changes, and tax policies. Fewer rate cuts would keep borrowing costs for homes and cars elevated. Analysts warn of an unusually high number of dissents at the December meeting.
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