Fed Faces Tough Choice: Balancing Inflation Management and Job Market Stability

Bitget App

Trade smarter

Bitget

News

Markets

Fed Faces Tough Choice: Balancing Inflation Management and Job Market Stability

Bitget-RWA2025/11/24 07:56

By:Bitget-RWA

- The Fed faces a December meeting dilemma: cut rates to ease labor market strains or maintain rates to combat persistent inflation above 2%. - Officials like Susan Collins argue current 3.75%-4% rates remain appropriate, while John Williams supports a 25-basis-point cut to reach neutrality. - Data gaps from the government shutdown delay key labor market insights, complicating decisions as Beth Hammack warns cuts risk prolonging inflation. - The FOMC will end quantitative tightening in December, signaling

The U.S. Federal Reserve is approaching a crucial decision at its December meeting, as officials remain split on whether to lower interest rates in the face of a strong economy, ongoing inflation, and a cooling job market. The Federal Open Market Committee (FOMC) will gather on December 9-10, with investors uncertain between a possible 25-basis-point rate cut or keeping rates unchanged. This internal debate highlights the broader challenge of managing inflation while supporting employment, especially as policymakers contend with

missing recent economic reports due to the government shutdown

Susan Collins, President of the Federal Reserve Bank of Boston, has been a prominent opponent of additional rate reductions, stressing that the current monetary stance is sufficiently tight. Speaking to CNBC, Collins argued that

keeping the federal funds rate target at 3.75%-4%

is essential to eventually bringing inflation, which is still above the Fed's 2% goal, under control as tariff pressures subside. She described the September employment figures as "mixed" and observed that the economy remains robust, while also noting the importance of closely watching the job market for further signs of weakness

as policymakers continue to review economic data

On the other hand, John Williams, President of the New York Fed, has indicated he is open to lowering rates, suggesting that

monetary policy is still "somewhat restrictive"

and that further easing could help move policy toward a more neutral position. His remarks, made at a Central Bank of Chile conference, led traders to increase their bets to nearly a 60% chance of a rate cut in December, reversing earlier expectations of no change

with analysts linking this shift to Williams' comments

. This development underscores the significant influence of FOMC vice-chairs like Williams in shaping policy outcomes.

Fed Faces Tough Choice: Balancing Inflation Management and Job Market Stability image 0

The disagreement among Fed officials is further complicated by

missing key economic indicators

. The Bureau of Labor Statistics (BLS) canceled the October jobs report and postponed the November release until December 19, leaving the Fed without up-to-date labor market information. Even so,

some policymakers believe that insufficient progress on inflation

—a central Fed responsibility—warrants holding rates steady. At the same time,

Fed Governor Christopher Waller has supported a rate reduction

to address what he describes as a "softening" labor market, pointing to sluggish job growth and increased layoff risks as reasons for his stance.

Adding to the debate,

Cleveland Fed President Beth Hammack cautioned

that further rate cuts could extend the period of high inflation and heighten risks to financial stability. She warned that "cutting rates to aid the labor market could lengthen this phase of elevated inflation," especially since core services inflation remains stubbornly high. Hammack's perspective is shared by those at the Fed who see inflation as the main concern, even as others focus on protecting jobs.

The Fed is also weighing broader changes in its monetary approach. In a separate announcement, the FOMC said it would stop its quantitative tightening (QT) program, which reduces the balance sheet,

starting December 1

. This move marks a shift toward stabilizing financial markets, though officials remain wary of the possible effects on inflation and lending.

As the December meeting nears, the Fed must navigate these competing priorities. With diverse opinions within the FOMC and limited data, the final decision is likely to represent a middle ground between fighting inflation and supporting employment. For now, the market remains divided, with

the CME FedWatch tool indicating a 40% chance

of a rate cut as of November 22.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops

Lock your assets and earn 10%+ APR

Lock now!

- Tether CEO Paolo Ardoino reaffirmed Bitcoin's value as a tool for financial freedom, emphasizing its role in enabling self-custody and autonomy from centralized institutions. - Tether's partnership with Ledn expands Bitcoin's utility by offering lending services without selling holdings, reinforcing its infrastructure-building strategy for digital assets. - Meanwhile, crypto firms like BitMine and Strategy face market volatility and regulatory risks, with BitMine reporting $328M income but declining stoc

Bitget-RWA•2025/11/24 10:08

Bitcoin Updates Today: Tether CEO: Bitcoin’s Strength Stems from Economic Independence

Zcash (ZEC) Halving Scheduled for November 2025: Driving Market Outlook and Influencing Price Trends

- Zcash's 2025 halving cut block rewards by 50%, reducing daily supply to 1,800 ZEC and boosting institutional interest. - Arthur Hayes urged ZEC holders to shift funds to shielded pools, reducing liquidity amid EU AML pressures. - Cypherpunk and Grayscale's $137M investments, plus Zashi Wallet's launch, expanded Zcash's institutional and privacy-driven appeal. - ZEC surged to $750 post-halving, fueled by $108M in treasury investments and 104% growth in futures trading volume. - U.S. regulatory clarity and

Bitget-RWA•2025/11/24 10:08

Zcash (ZEC) Halving Scheduled for November 2025: Driving Market Outlook and Influencing Price Trends

Privacy-focused cryptocurrency ZEC sees price jump amid regulatory changes and shifting market sentiment

- Zcash (ZEC) surged to $683 in 2025, driven by U.S. regulatory clarity via the Clarity and Genius Acts, which legitimized privacy-focused crypto. - Institutional adoption grew, with Grayscale, Cypherpunk, and Winklevoss investing $137M-$58.88M in ZEC, viewing privacy as a strategic asset. - Quantum-resistant upgrades and shielded pools boosted ZEC's utility, though risks like regulatory shifts and overbought conditions remain. - Analysts debate ZEC's long-term viability, balancing its privacy innovation a

Bitget-RWA•2025/11/24 10:08

Privacy-focused cryptocurrency ZEC sees price jump amid regulatory changes and shifting market sentiment

Bitcoin Updates: As Investors Pull Out of Bitcoin ETFs, Altcoins See Increased Inflows During November Sell-Off

- U.S. bitcoin ETFs lost $1.22B in net outflows for the week ending Nov 21, extending a four-week negative streak with total November redemptions reaching $3.79B. - Bitcoin fell below $82,000 amid a 7-month low, triggering a $350B crypto market cap drop as Citi noted 3.4% price declines per $1B ETF outflow. - Solana and XRP ETFs bucked the trend with $300M and $410M inflows, attracting institutional interest despite broader market weakness. - Analysts warn of potential 50% further Bitcoin declines, while F

Bitget-RWA•2025/11/24 09:54