Analyst: Labor Data May Mark the End of the Fed’s “Hawkish Rate Cut” Era

On December 5, Daniel Loughney, an analyst at Mediolanum International Funds, stated that, in line with market expectations, he anticipates the Federal Reserve will lower the federal funds target range by 25 basis points next week, driven by weakness in labor market statistics.

The head of fixed income and managing director said in a report: “Recent rate cuts have been viewed as ‘hawkish cuts,’ but this time, the weak labor market may prompt a more dovish response.” He noted that the key focus will be the “dot plot”—that is, FOMC members’ rate forecasts—as well as the FOMC’s Summary of Economic Projections for the quarter. Market participants will look to these for any signs of a shift in the Fed’s sentiment, which could reshape expectations for monetary policy in 2026. (Jinshi)