The Dow Jones Industrial Average (DJIA) held steady on Thursday, hovering near record highs as investors digested the Federal Reserve’s (Fed) latest policy signals. The central bank delivered its second consecutive quarter-point rate cut this week, as widely anticipated, but a cautious tone from Fed Chair Jerome Powell dampened hopes for another reduction in December.
During Wednesday’s post-meeting press conference, Powell highlighted that the ongoing US federal government shutdown has disrupted the release of key economic data — including crucial inflation figures and monthly labor reports. Without these data points, which are essential for the Fed’s dual mandate of managing inflation and promoting employment, policymakers may be forced to adopt a wait-and-see approach until normal reporting resumes.
Market doubts over a December rate cut
With the Fed facing limited visibility into the economy, expectations for a third consecutive rate cut at the December 10 meeting have weakened. Rate futures now suggest a stronger likelihood of the next policy adjustment taking place at the Fed’s first meeting in 2026.
If December passes without another cut, investors will be closely watching the January 28 meeting for potential easing, while a minority of market participants are already betting on a third reduction as late as March next year.
