A December rate cut suddenly looks shaky as the market weighs Trump implications

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Schwab bond strategist Kathy Jones said she'll be watching Fed minutes released Wednesday for clues about what's ahead.

With uncertainty lingering over how President-elect Donald Trump's policy intentions could affect vital parts of the economy, December no longer looks like a done deal for an interest rate cut. Traders on Monday were pricing in barely a 50% probability that the Federal Reserve will lower its benchmark rate when it convenes Dec. 17-18, according to the CME Group's FedWatch gauge. A few weeks ago, the implied probability was north of 80%, or a virtual shoo-in.

Liz Ann Sonders, Jones' counterpart at Schwab on the equity side, agreed, noting how difficult it is for business leaders to separate out the noise from reality. "If you're a business leader and you're trying to plan out, you've got to be in wait and see mode in terms of those policies like immigration and tariffs," Sonders said.

 

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