In the aftermath of the last FOMC meeting on October 29th where the key portion of the statement was the following:
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
One has to wonder just why bother cutting at all other than political pressure from the White House.
Fast forward to Wednesday’s semi-periodic assembly of the blind leading the blind, and here we are again, data dependent on non-existent accurate government data and an unwillingness to totally eradicate the system inflation in exchange of attempting to save a jobs market which has been imploding since “Liberation Day” as many tried to warn.
What does this mean for today at 2 pm?
The street seems resigned to a “hawkish cut” scenario as every business channel has been repeating the same idea all day long, like Professor Siegal on CNBC:
🔥ECONOMIST: A “HAWKISH CUT” TOMORROW
— Coin Bureau (@coinbureau) December 9, 2025
WisdomTree's Chief Economist Jeremy Siegel said, “I think we're going to hear a hawkish 25 bps cut and dissent inside the Fed.” pic.twitter.com/Rx2AZtgBIu
So just what is a “hawkish cut” in the current era when doves cry?
From a Fortune magazine article just two days ago:
Wall Street expects a hawkish cut, meaning Powell is likely to avoid signaling a January cut to appease Fed hawks, after joining doves to lower rates this month.
“Chair Powell is facing the most divided committee in recent memory,” analysts at Bank of America said in a note on Friday. “Therefore, we think he will attempt to balance the expected rate cut with a hawkish stance at the press conference, just as he did in October.”
But at the same time, the Fed chief has been insistent that policymakers are not on a predetermined course and that rate moves depend on the data that come in.
As a result, BofA is doubtful that he can pull off a hawkish cut so easily, considering all the market-moving data that will come out between the two meetings, with some delayed owing to the government shutdown.
What BoA just said without saying is that while Powell may lead the charge for a 25 bps cut, trying to frame anything as “hawkish” will be viewed highly skeptically considering the background data that many of us nerds on the internet have been pointing out for months.
Which by the way is considerably more dangerous than anything else starting with the FOMC press conference.
Why one might ask?
Thanks to concentrated attacks by President Trump and the Fed assault squad inside the White House relentless attacks on Jay Powell’s already teetering reputation, it is now in completely in tatters and twisting in the wind like a shredded t-shirt on a flagpole during a Category 5 hurricane. Worse, this infection has spread to the credibility of the American central bank as a whole and a recognition that perhaps, as many of us have been screaming from the rooftops, it is deserved for turning a blind eye to financial malfeasance some thirty years.
For a central bank, it’s the ultimate nightmare as it is about to become usurped and absorbed as a political arm of an administration which appears to have its economic policy guided by this guy in the photo below.
Look for a lot of false promises from Chair Powell on Wednesday but listen to what his plan is for MBS (Mortgage Backed Securities) and US Treasury Bill purchases as that is the real key. Basically speaking, this FMOC statement will be viewed as a fool’s errand without clarification as to its future QE-lite policy towards bond market support. If the FOMC indicates a true willingness to allow the long end of the curve to move higher (10 year duration +), then God helps us as to what kind of punishment the bond and equity markets may impose on us all.
Buckle up, as it’s not the FOMC statement ladies and gents, it’s the press conference, and this will effectively be Jay Powell’s last one as Chairman of the Federal Reserve.
