The Federal Reserve (FED) spokesperson: The Fed's rate cut in December becomes a challenge, data gaps lead to at least three board members voting against it.

Nick Timiraos reveals the Federal Reserve's dilemma of falling into a “data vacuum,” explaining the internal divisions before the December meeting and the leadership challenges faced by Powell. (Background: Raoul Pal warns: If the Federal Reserve does not print more money for QE, “liquidity will be scarce,” possibly repeating the 2018 repo market financial crisis.) (Supplementary background: The U.S. will announce the September non-farm payroll report next week, with the market closely watching the impact of the Federal Reserve (Fed) interest rate cut.) With only three weeks remaining until the Federal Open Market Committee meeting on December 9-10, Wall Street Journal senior reporter Nick Timiraos has first painted a picture of the severe divisions facing the Federal Reserve. The report points out that a 43-day government shutdown has obstructed key statistics, forcing officials to decide whether to cut interest rates without complete information, which has the global market focused on the Federal Reserve's trade-offs between inflation and employment. The data black hole hinders decision-making. Timiraos starts with Vice President Jefferson's cautious remarks on November 17. Jefferson reminds that the balance of policy risks has changed, stating, “The evolution of risk balance highlights the necessity to slow down interest rate cuts.” This statement lacks directional guidance but highlights officials' unease about the information gap. Due to the shutdown delaying reports from the Bureau of Labor Statistics and the Department of Commerce, the market's bets on interest rate cuts have rapidly adjusted. According to CME Group data, the probability of a rate cut in December has dropped from 60% a week ago to 45%. Timiraos describes decision-makers as “groping in a data vacuum,” making it difficult for the outside world to capture the Federal Reserve's next step. The divide between hawks and doves is clearly defined. The report lists the core demands of both sides. Hawks are concerned that inflation has been above 2% for four consecutive years and that new tariffs could push prices higher. Kansas City President Jeffrey Schmid, Boston President Susan Collins, and Governor Michael Barr are increasingly wary of premature easing. Collins emphasizes that the threshold for relaxing policies is “relatively high,” while Atlanta President Raphael Bostic advocates maintaining high interest rates until inflation clearly returns to target. Doves, on the other hand, focus on the cooling labor market. Governor Christopher Waller noted in an interview that private hiring in September and October has nearly stagnated, and companies are starting to discuss layoffs. San Francisco President Mary Daly also believes that employment has “cooled significantly.” Governor Stephen Miran, appointed during the Trump administration, advocated for more significant rate cuts at the October meeting. Timiraos specifically reminds that there was a bidirectional dissent at that meeting, with one supporting larger cuts and one insisting on keeping rates unchanged, the first occurrence since 1992, clearly leaving cracks in the official record. Powell faces an “impossible task.” The divisions are not merely academic debates; they also test Chairman Powell's leadership. Timiraos cites insider sources describing Powell's need to convey clear signals externally in an environment lacking consensus, which can be termed as an “almost impossible task.” Powell recently admitted at a press conference that a rate cut in December is “far from certain.” Market sentiment has thus swung dramatically, as indicated by the expanded daily fluctuations in traders' interest rate path predictions from CME futures. Timiraos assesses that if the meeting results in at least three dissenting votes, it will once again impact the Federal Reserve's credibility. Timiraos finally warns that if the hawks win, it could suppress an already fragile recovery; if the doves win, it could lead to a resurgence of inflation. For the capital markets, a divided Federal Reserve resembles a giant ship that is difficult to steer, with every turn affecting global liquidity. Timiraos's article outlines a key coordinate for investors: the December meeting is not only a decision on interest rates but also the ultimate test of the resilience of the Federal Reserve's system and the leadership of the Chairman. Related reports: The Federal Reserve's mouthpiece warns: There is no consensus on the December rate cut, the information black box has become a ticking time bomb. Morgan Stanley warns: Ending QT by the Federal Reserve ≠ restarting QE, the U.S. Treasury's bond issuance strategy is key. Federal Reserve hawks: Bostic, advocating “no rate cut in December,” suddenly announced retirement in February next year. <The Federal Reserve's mouthpiece: The December rate cut becomes a challenge, data deficiencies lead at least three governors to cast dissenting votes> This article was first published in BlockTempo's “Dynamic Trends - The Most Influential Blockchain News Media.”