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>>Barclays analysts unveil the Fed’s December outlook, highlight Powell, and discuss Bitcoin.

Barclays analysts unveil the Fed’s December outlook, highlight Powell, and discuss Bitcoin.

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about 7 hours ago

Data Constraints and Internal Split

The Fed has been operating without key economic data because of the U.S. government shutdown. A deepening rift over a December rate cut has emerged, which officials say is unprecedented in Jerome Powell’s eight‑year tenure. Wall Street Journal reporter Nick Timiraos highlighted the seriousness of the disagreement. This internal division adds uncertainty to the upcoming decision.

Market Expectations

CME FedWatch data shows a 71.5% probability that the Fed will cut rates by 25 basis points in December. The market has priced in a high likelihood of a cut despite limited data. New York Fed President John Williams noted “room to further adjust interest rates in the short term.” Analysts see the odds of a cut remaining strong.

Analyst Forecasts and Outlook

Barclays projects a narrow vote split—six members may favor holding rates steady, five may support a cut—and believes Powell will steer the final decision. The firm expects a 25‑basis‑point reduction, which could bolster Bitcoin’s recovery. Wells Fargo economist Tom Porcelli cites a weakening labor market, with unemployment rising to 4.4%, as justification for a cut. Timiraos adds that a reduction will not happen unless Powell actively pushes for it.