If traders didn’t get the message following last month’s Fed meeting, they get it now: Another rate cut in December isn’t a sure bet. “Far from it,” as Jerome Powell himself put it.

As the US government reopened on Thursday, the market-implied odds of a third consecutive quarter-point rate reduction from the Committee slipped to just over 50%, down from 65% or so earlier in the week.

The figure below’s a reminder: A move on December 10 was priced as a foregone conclusion just prior to Powell’s press conference last month.

This is vexing for Donald Trump and I’d expect him to dial up the pressure on Powell in the weeks ahead.

Earlier this week, Stephen Miran indicated he’ll vote for a 50bps reduction again next month, which is to say he’ll be three for three in terms of dissenting (there’s no chance of a half-point move).

It’s entirely possible Chris Waller and Miki Bowman both vote for a 25bps cut. If they do, and the Fed stays on hold, it’d be the first time three governors have dissented at one meeting since the 1980s.

Policymakers are of two minds on the ambiguity introduced by the government data blackout. For Powell (and certainly for the hawks), the persistence of near three-handle inflation and the dearth of new information is cause to pause.

For Miran and the doves, the very same “fog” is a reason to cut — because the missing data might very well suggest that downside risks to the labor market have become more acute. After all, that’s what a hodgepodge of private sector updates seem to show.

It’s worth noting that the post-pandemic macro seasonal argues for a re-acceleration in the data.

There’s the chart. It’s from Nomura’s Charlie McElligott.

“[In] the ‘new seasonality,’ adjustments have tended to see a sequencing where data is hot out of the gates in Q1 but then [during the] spring we mean revert slower before a (false optic) ‘growth scare’ at some point [over the] summer which then too ‘corrects’ into an ‘upside surprise’ through Q3 [that] tends to hold well enough through Q4,” McElligott wrote.

Who knows whether the Q4 part of that “new seasonal” will repeat in 2025, and you can take “who knows” quite literally. According to Karoline Leavitt, there may “never” be an October jobs report, nor a CPI tally for last month. (Kevin Hassett on Thursday said the BLS will release the hiring figures for October but not the unemployment rate.)

“The resumption of dataflow has been interpreted as giving the FOMC a potential opportunity to deliver a Santa Pause in the process of normalization,” BMO’s Ian Lyngen and Vail Hartman remarked on Thursday, adding that traders will probably brush away a consensus September NFP print (remember: We’re still missing that jobs report too) as old news while interpreting any downside as confirmation that hiring had indeed slowed or even gone into reverse by the time the government shut down.

“That being said, the conviction underlying any move triggered by the first marquee datapoint in six weeks will be limited by the fact that there will be more updated information on offer ahead of the FOMC’s December 10 decision,” Lyngen went on. “Despite the fact that investors have long awaited the resumption of dataflow from the BLS, the upcoming reports will still likely be met with some skepticism given the data-collection delays and timetable shifts.”