November 3

11/3 – Last week, the Federal Reserve (as expected) lowered its federal funds interest rate by ¼ percentage point. What was unexpected was that Fed Chair Jerome Powell made it clear that another ¼ point cut in Dec was not a sure thing. The Fed is wrestling with 3% inflation – well above its 2% target – and the prospect of lagged inflationary effects from both tariffs and government spending in the Big Beautiful Bill. On the flip side, the Fed must consider a weak jobs market. Pre-pandemic, from 2010-2019, the U.S. averaged 185,000 new jobs per month. In 2025, those numbers have plummeted to 123,000 per month for Jan-Apr, and just 27,000 for May-Aug. There are no numbers for Sept-Oct due to the shutdown, but the recent surge in high-profile layoffs is not positive news. Expect the inflation rate to continue to creep higher, but to be overshadowed by job losses – forcing the Fed to lower rates again in Dec and early 2026.