(Reuters) – U.S. Federal Reserve officials head into the quiet period ahead of their Dec. 17-18 meeting with new jobs numbers expected to show a rebound from the weak reading in October and a growing sense among officials that the labor market remains in solid shape.
Several policymakers are due on Friday to give their final public remarks before the policy meeting after a week that has solidified market expectations that the Fed will cut rates by another quarter percentage point to a range of 4.25% to 4.50%.
Fed Governor Michelle Bowman, Chicago Fed President Austan Goolsbee, San Francisco Fed President Mary Daly and Cleveland Fed President Beth Hammack are all due to speak or publish remarks through the day.
The Fed’s internal communications rules forbid public comments on monetary policy beginning on the Saturday preceding the week before each two-day meeting.
Earlier this week top Fed officials pointed to Friday’s jobs numbers for November as among the chief remaining data points they need to make a decision.
On Monday, Fed Governor Christopher Waller said he was “leaning towards” a rate cut but would reserve final judgment to review the jobs numbers and inflation data due next week.
In comments on Wednesday Fed Chair Jerome Powell noted that inflation was running higher than policymakers had expected at this point, and repeated his prior comments that the Fed could be careful in managing the endgame of its roughly three-year fight against inflation.
Along with progress on inflation stalling in recent months, with some key measures still more than a half point above the Fed’s 2% target, the economy overall has been stronger than expected – something the Fed may get further confirmation of in the jobs report.
The caution Powell spoke of, however, may come more into play next year, with many analysts expecting a cut in December but a pause after that.
The chair’s comments were “well short of challenging the market’s growing confidence that a December cut is the base case,” wrote Evercore ISI Vice Chair Krishna Guha.