Markets face a week of hesitation rather than conviction. The message from the Federal Reserve in late-October has changed the tone: A December rate cut is no longer a certainty. Chairman Jerome Powell stressed that policy will depend on incoming data, yet a federal government shutdown means much of that data may not even be arriving. Without clear visibility, the Fed is \u201cdriving in fog\u201d, and traders are reassessing how quickly easing might resume. This leads to a conflicted dollar, cautious equities, and traders leaning toward safety until the fog clears.<\/p>\n\n\n\n
Before the October FOMC meeting, futures markets were nearly unanimous in expecting a\u00a0December rate cut. But after Powell\u2019s remarks, the mood flipped. The\u00a0CME FedWatch tool\u00a0shows cut odds plunging from roughly\u00a090% to 63%<\/a>, while\u00a0Polymarket odds\u00a0echo a\u00a066% probability\u00a0of a quarter-point cut and\u00a032% chance of no change.<\/p>\n\n\n\n In other words, the market still expects easing, but no longer trusts it.<\/p>\n\n\n\n This shift stems from Powell\u2019s emphasis on\u00a0divided policymaker views\u00a0and the\u00a0data blackout\u00a0caused by the federal shutdown.<\/p>\n\n\n\n