CME Fedwatch shows a big dip in December rate cut odds.
According to CME Fedwatch, the odds of a December rate cut fell to 51.9 percent today from 62.9 percent yesterday and 95.5 percent a month ago.
This is not on any economic news that I can see. Rather it’s attributed to a statement by Sue Collins, a voting member on the FOMC.
“Absent evidence of a notable labor market deterioration, I would be hesitant to ease policy further, especially given the limited information on inflation due to the government shutdown,” Collins said in prepared remarks on Wednesday.
That seems a bit peculiar because the labor market is undoubtedly soft. What the Fed will not know by the December 10 meeting is what the inflation picture looks like.
Due to the government shutdown, the BLS did not collect CPI (inflation) data. It will have most of the jobs data other than the Household survey that determines the unemployment rate.
The establishment survey is automated so the BLS will be able to produce its most-watched (but very questionable) establishment report on the number of jobs. The Fed will also have claims data gathered by the states.
The CPI and the unemployment claims reports were due today. The former is likely to be cancelled. The claims data should be out shortly.
Economic Data Releases
For a table of expected economic releases, please see The Great Federal Re-Opening of 2025, When Will We Have Reports?
The CPI report for October may be cancelled. Here’s an expected schedule.
For discussion of the labor market, please see Revelio’s Realistic Assessment of the US Labor Market and Jobs – Sinking Fast
Kudos to Revelio for providing an excellent set of jobs-related data.
Meanwhile, the market is not pleased with the change in the odds. The DOW is down 1.65 percent, the Nasdaq is down 2.29 percent, and the S&P 500 is down 1.65 percent.
But look on the bright side. Cisco hit its first new high in 25 years today.
Googl invests $6.5B to build a data center in Germany, $5B in Belgium, $15B in Visakhapatham India and in Xmas Island with Australia south of Jakarta. Total 2025 capex: $85B.
China produce x2 more energy than we do. Data centers consume a lot of energy
to cool down chips, requiring new investments. Several new techniques cool down chips directly instead of cooling the whole system. Scientists are testing new techniques to operate quantum computers in room temp. Packaging and precision cooling of chips more efficiently is much more important than the chips themselves and their software. It’s like vertical vs horizontal drilling.
Holes in the roof created by drones with explosives attached could provide free cooling and reduce the need for any electricity.
Interesting that the banks are clamoring for injections of more liquidity when the Fed is signaling stable interest rates. It would seem to be an inflection point.
Definitely not a time for leverage or debt.
Breaking news: TACO to TACO.
https://www.cnbc.com/2025/11/14/us-to-remove-tariffs-on-some-products-from-ecuador-argentina-guatemala-and-el-salvador.html
The United States said Thursday it will remove tariffs on some foods and other imports from Argentina, Ecuador, Guatemala and El Salvador under framework agreements that will give U.S. firms greater access to those markets.
The agreements are expected to help lower prices for coffee, bananas and other foodstuffs, a senior Trump administration official told reporters, adding the administration expected U.S. retailers to pass on the positive effects to American consumers.
So it seems the solution to high prices is to OPEN TRADE with OTHER nations and ELIMINATE tariffs. Oh my god! Trump is brilliant! Why didn’t anyone think of this before? Give this man the Nobel Peace Prize!
Trumpstein looking out for Milleistein.
A more complete analysis, would show that not only are Tariffs working, but Countries are just fine with the U.S. equaling the playing field. Some can’t wait to start doing business with the U.S. and understand why we must keep Tariffs even though they have dropped there’s and/or the Pricing.
Your cherry picked data is insulting to what was actually Achieved! I have added the pertinent parts that were wonderfully orchestrated over the last few months of work by the Trump ADMINISTRATION!!!
– The United States said on Thursday it will remove tariffs on some foods and other imports from Argentina, Ecuador, Guatemala and El Salvador under framework agreements that will give U.S. firms greater access to those markets.
– The agreements are expected to help lower prices for coffee, bananas and other foodstuffs, a senior Trump administration official told reporters, adding the administration expected U.S. retailers to pass on the positive effects to American consumers.
– The framework deals with most of the four countries should be finalized within the next two weeks, the official said, with additional agreements seen as possible before the end of the year.
– Secretary of State Marco Rubio and Brazil’s Foreign Minister Mauro Vieira discussed a framework for a U.S.-Brazil trade relationship in a meeting this week,
– Trump administration was considering further tariff exemptions on imported food products such as beef and citrus to ease prices. U.S. officials were having “quite constructive” talks with other Central and South American countries, and could conclude more trade deals before the end of the year, the official said, adding that trade talks with Switzerland and Taiwan on Thursday had also been quite positive.
– Officials in Argentina, El Salvador, Guatemala and Ecuador welcomed the deals.
– The framework agreements announced on Thursday would maintain 10% tariffs on most goods from El Salvador’, Guatemala and Argentina, where the U.S. had modest trade surpluses, and 15% for imports from Ecuador, where the U.S. had a trade deficit.
– “With all of these deals, the ones in Asia, the ones we’re announcing today, we maintain the tariffs, we give some tariff relief on certain products or goods, but at the same time, we open up foreign markets in ways that they have not been open before,”
This is extremely Positive News!!!
The American people aren’t buying what you’re selling.
https://www.youtube.com/watch?v=Ws4vfh5SqGw
Trump is a lame duck president. GOP losing elections in states like deep red Mississippi is all the proof you need.
But as a TWS cult member, you’ll keep doubling down till the end no doubt.
– The American people aren’t buying what you’re selling. > I see it more as the People are starting to see things improve, despite the MSM and Democrat Base. As more positive events become unable to be hidden, people will more and more lean Republican.
– Trump is a lame duck president. > Trump is engaged as ever. He has a fantastic Team around and behind Him. His second term is starting out very nicely for America.
– But as a TWS cult member, you’ll keep doubling down till the end no doubt. > I will continue to call it as I see it. I am consistent in my view of good and bad for our County.
>> The shutdown was needless, silly, and without leverage. Nothing gained as a result. It gets old over and over again…
Another addled dispatch from cloud-cuckooland
Hey, I like Extremely Good News for Our Country, and you should as well…
Timmy, come to Epstein spa. with Billie.
When the loose terd finally hits the proverbial fan, it will be more on the magnitude of 10000 slopping full septic tankers pumping their contents full blast into 1000 Boeing engines spinning at full rev.
Treasury Secretary Bessent says Americans will soon catch a break at the grocery store:
“You’re going to see a substantial announcement over the next couple of days in terms of things we don’t grow here in the United States — coffee being one of them. Bananas, other fruits, things… that will bring the prices down very quickly.”
Bessent is going to invest $1 billion in banana and coffee farms in North Dakota! What could go wrong?
It would be tax payer money why would he care?
Bring the prices down OR Bring the Profits up? What further price control do we have, or is this a feel good 1-3 year term? What did we have to give for this new found pricing formula? Did we happen to buy a bunch of other stuff as well? Just curious why now, and with what and whom?
Bessent is an expert on fruits.
Mucho reeting and squealing today over a puny imaginary rate cut….. some of these bloaters are really living on the edge.
The 10 year US bond yield has been above the 50 day moving average for nearly 2 weeks. Today the 20 day moving avg broke above the 50 day moving average. The bond market is taunting the Feral Reverse once again. The line of support made by bottoms of 13 and 8 month cycles form are still in an uptrend. The line of resistance made by the past three 5 week cycles has been broken, and remains broken for the past 6 trading days. Odds are a significant yield bottom was made at October 2025 lows.
After shooting 4-5 blanks, the Feral Reverse is going to have to channel its inner Volker pretty soon.
The only way long yields continue to move higher is if inflation continues to move higher. We are far enough into Trump’s tariffs that any upward pressure on inflation is 90% baked in.
$3T+ in liquidity has been drained. The labor market is running on fumes. The housing market except outside of NYC is frozen. Millions of illegals have been deported & will continue to be deported, reducing aggregate demand. Layoffs are on the rise. Rent is falling which will put downward pressure on the 32% of CPI that comes from housing. All that’s needed is a spark of AI deflation & a real preamble to a recession will form very quickly.
The Fed is using its runoff slack to buy only short-term treasuries which is exactly where the Treasury wants the market to go. This means there’s less demand for longer treasuries, pushing down the price & raising the yield.
This isn’t rocket science like you seem to make it out to be with 20DMA above the 50DMA. Rather, it’s the Fed manipulating the bond market right in front of our eyes. By early next year, the Fed will start up limited QE beyond its balance sheet runoff.
Part of the upside to all of this is higher mortgage rates that everyone wants to go away. Well, damn everyone, the housing affordability crisis is only solved in one of two ways: recession or higher mortgage rates for years to come.
They call it “don’t bet against the Fed” for a reason.
That’s not the only way – global de-dollarization will do it, as global demand for US $ falters, interest rates paid will have to go up or no one will take the chance on buying US debt.
Or the money printers can be revved up some more, and the US can buy all it’s own debt with more printed ca$h (debt) leading to a Budget catastrophe and hyper-inflation in the USA, as the purchasing power of the $ collapses. Think a wheelbarrow full to buy a loaf of bread, just like in Germany when their hyper-inflation happened, or in Brazil more recently, to cite 2 examples. Digital pricing on shelves allows prices to rise several times a day, as the currency falls in value.
200 DMA and EMA’s mean nothing in those scenarios, they will be pointing down like the angle of a double Black Diamond hills at a ski resort. There is no technical analysis that will matter at that point, you will be defending your home from armed starving city dwellers. Lead will be the most valuable metal at that point.
SInce no one in Washington can muster a single $ in Budget cuts, (massive spending cuts are the only other way out) and raising taxes won’t cover it, I would say this is the most likely outcome. America has to crash head on into the brick wall, and then things might change, far too late by then. And not just the USA, every Western country is on the train speeding over the cliff.
VDH has a couple of great points:
The shutdown’s purpose was to slow down the economy, trying to push us towards a recession. This very article by Mish supports this case. The shutdown lasted 43 days in order to ensure important BLS economic data was not released by 121/10, thereby helping to ensure the Fed passes on another rate cut. And it’s quite possible that the Fed is actively engaging in politics. With all of Trump’s pressure tactics, it seems likely that the Fed is slow rolling cuts to hurt Trump. Payback is a bitch isn’t it?
And the Fed may well be rooting against America First. Under Trump, deficits probably will shrink. Under Mamdani, deficits will explode. Which benefits banks more?
Victor Davis Hanson: Trump’s Battle for the Economy Ahead of Midterms
Trump lost the midterms last Tues. night.
“Under Trump, deficits probably will shrink.”
Or not. He extended the tax cuts and is giving away billions to the military industrial complex. He’s proposed handing out revenue from tariffs before SCOTUS slaps them down and possibly orders the tariffs be repaid.
2026 will certainly be a pivotal year. The BBB cuts $500B from Medicare over the next 10 years. Yes, if tax receipts falter in 2026, then I agree the deficit will rise which is typical of how things work out. This also means we have a recession, or the economy deteriorates towards one. If this happens, then I think the GOP will stop trying to cut the budget.
Time will tell.
SPX might rise to 7K, before Chuck’s next onion peeling.
Each new day is a day Trump might decide the new plan of prosperity is reduced government deficits. Perhaps someone could introduce Trump to the Clinton / Gingrich budget deals of 1995 & 1997.
True, it may be impossible to get Congress to go along with cuts, but Trump could start singing that time and maybe the market would offer some respect. As it is, the market is assessing the Trump / GOP / DEM government plan and declaring it counterfeit.
Trump could become a deficit hawk. Also, Danny Devito could win gold in the Olympic high jump.
Chuck might shut the gov down again for Obamacare. Obamacare is a lever to create chaos, mayhem and bloodshed. AOC is noise, She isn’t Capo dei Capi. The regime change king might order to destroy Trump’s gov again. Today end of the shutdown was the knock knock. Results are great. Who is the king ?
No kings.
The long term history of kings is a little bleak.
Mish “soft” at inside of 0 statistical change in my book is not a reason to cut more, especially with boods and financial asset inflation still running hot and hotter.
Welcome to Trump’s America and the “golden age”:
Foreclosures up 20% and Florida is #1 at 1 out of 1829. California #10 (1 in 3407) and Texas #11 (1 in 3456). Those are the three most populous states red & blue.
https://www.dailymail.co.uk/real-estate/article-15285273/foreclosures-october-financial-crash.html
Maybe Epstein will save us all by getting Trump impeached and out of office. Wouldn’t that be ironic?
Got PUTS?
Bitcoin will show the way.
To ZERO
Off 5245 today.
I’m going to offer an unpopular but accurate opinion: Unemployment has to reach at least 6% to get inflation under control. Wage growth for job stayers is currently 4.5% and 6.7% for job changers, which is unfortunately the prominent driving force behind inflation.
Weakness in the labor market is the last thing the Fed should be focused on at this point. Wage growth needs to fall to 3% overall before the Fed even thinks about cutting rates to “support” labor.
IMHO, the primary driver of inflation is consumers willingness to pay higher prices.
And I’m proposing a way (the only way?) to fix that attitude. Prices are set by what people are willing to pay, not by supply chains or cost of production, period.
Removing all government subsidies on every item, in every form, would be a better solution here. Unfortunately, government is going full bore in the opposite direction, now coming up with creative new ways to grant new and exotic subsidies.
Well, some costs aren’t easy to just not pay. For example, property taxes, car and house insurance, utilities, health care, student loans, alimony, food, etc. Others are possible not so easy like car payments.
Sure you can move the needle on some of those costs, but it depends on your particular situation.
Not at all easy, and some you list are ones that rise and/or rise often. My property tax recently doubled when redone. All Insurance on All things has risen, and Electricity and Water has boosted upwards as well!!
Pay your home off so you can get rid of homeowners insurance…
Mostly with borrowed money.
Bingo!! Credit induces inflation. Those as old as dirt, like myself, will remember the days before credit cards. Add to that government funding programs and prices balloon.
Good point, and I totally agree it plays a big role. My added thought, is if it’s willingness or just because they can?
Credit has been handed out pretty freely along the way, and that makes one feel as though they have money IMO. A swipe here and a swipe there, and pretty soon you’re spending some loot!
This is Amazons business model so to speak… Who doesn’t like getting gifts in the mail, and not even having to go out and buy it!
Dude, I use that 3, 6 or 12 month pay later stuff on Amazon like crazy! I love letting Amazon finance my purchases interest free over 12 months.
That really one applies to the top 30-40%. Everyone else is quite pissed off about it, but you do make a good point.
Except that inflation has moved from goods (2021-2023 time frame) to services (2024-2025). Its VASTLY harder to get services inflation (which is primarily wage based) under control compared to goods inflation (which are easier to forgo / can bring more production on line to meet demand etc).
In other words consumers don’t have much choice but to pay with services inflation and they contribute to it by themselves demanding higher wages to pay for these things so it’s an endless spiral.
Exactly my point. Thanks for clarifying the gospel.
And how do you achieve such unemployment with millions of boomers retiring or expiring every day? Trump deporting slave labor also doesn’t help increase unemployment nor reduce wages.
And young people not having kids and an entirely different low production work ethic won’t help either.
Perhaps that’s why so many think AI and robots will save everyone, it won’t.
Without all the subsidies coming at people from every possible direction, you would be surprised how fast people would go back to *productive* work.
I’ll just leave this here. Plenty of work has always been available.
https://fortune.com/2025/11/12/ford-ceo-manufacturing-jobs-trade-schools-we-are-in-trouble-in-our-country/
Speaking on the Office Hours: Business Edition podcast, Farley said Ford had 5,000 open mechanic positions that it hasn’t been able to fill, despite an eye-popping $120,000 salary—nearly double the American worker’s median salary.
And it’s not just Ford, added Farley. The carmaker’s struggle to fill jobs that require training and manual labor are indicative of a general shortage for manual-labor jobs in the U.S., he added.
‘We are in trouble in our country’
The last I checked, I haven’t read about customers using Ford dealerships complain about cars taking months to be repaired.
I wouldn’t believe a damn thing Farley says. Just because he claims this doesn’t mean it’s true or to the extent he’s suggesting.
And Trump made the valid point yesterday, that you can’t just take someone off unemployment & have them start making missiles.
The same thing goes with auto mechanics. And I’ve never seen any advertisement anywhere clamoring for people to go to Ford wrench turning school.
I agree with Jeff. The economy hasn’t reached the point where mass numbers of Americans are changing careers into hands on work. And this issue is way more complex than you act like someone can snap their fingers & make the problem go away.
And most importantly, this isn’t something that just popped up 10 months ago, when Trump took office. It’s been building for at least 10-15 years.
Which unemployment measure needs to reach 6%? The one Mish prefers already has unemployment at or very close to that number and it has been for a couple of years now.
In reality the free Covid money from 2020-2022 is still sloshing around the system and that’s whats driving inflation. Its moved from some areas into others but the affect of all that free money is still there. It was always going to take a decade or so to absorb all that free money and we barely half way there.
I think its sloshed into the stock market housing and the wealthy already. We live in a nation where 1-8 people are on snap. Something like 63 percent of households would have to use credit cards to cover an unexpected 500 expense. There is probably a mix of poor and just bad money management in the second one.
Maybe thats why its a k economy or whatever they are calling it these days.
But look on the bright side. Cisco hit its first new high in 25 years today.
Results of government stimulus, where would it be without the government stake?
In the wise words of Juicy J: “he thought that he was living life until he hit the ground”
Is this the end of tulipmania? Or can we push it just a bit harder?
Investigate what the experts are writing about AI, AGI and ASI and you may determine shit really doesn’t matter.
Meanwhile what the experts are writing:
“AI is basically a confident lying machine”
“AI is incredibly useful but not for what people wish it was”
“AGI is not going to be a LLM because that’s not the right framework for it”
It looked good, companies bit easily, they got no RoI, and the market turned circular to maintain itself while crediting AI for “enabling” mass firings from way over hiring during the pandemic.