PPI Hints at Muted Rise in PCE; Where Fed Officials Stand on a December Rate Cut By Michael Maloney
Higher energy and food costs lifted wholesale prices in September, the Labor Department said Tuesday, though certain items that feed into the Federal Reserve's preferred inflation metric are likely to leave that reading little changed from recent months. And ahead of next month's Fed interest-rate decision, we take a look at the stances of the 12 policymakers who will vote. Elsewhere, the Reserve Bank of New Zealand cut interest rates further on Wednesday in an effort to spur recovery in the moribund economy, marked by unemployment at a near-decade high.
Note to Readers: The Central Banking newsletter won't be published Thursday or Friday in observance of the Thanksgiving Day holiday in the U.S. We will be back Monday.
Top News Wholesale Prices Hint at Mild Rise in Fed's Preferred Inflation Gauge
After declining by 0.1% in August, prices charged by producers rose by 0.3% in September , in line with economists' expectations. Excluding food and energy, the producer-price index rose by less than forecast and climbed 2.6% from a year ago, the mildest increase since July 2024. The producer-price figures landed more than a month behind schedule because the government shutdown delayed data releases.
Bessent Says Next Fed Chair Needs to 'Simplify Things'
President Trump could pick the next Fed chair
before Christmas, Treasury Secretary Scott Bessent said on CNBC's Squawk Box. Bessent also said the Fed has become an overly complex operation that's no longer about just setting the price of money, taking the country into an era he dubbed an "ample reserves regime."
Bets Surge on Kevin Hassett Becoming Next Fed Chair
Bets on Kevin Hassett becoming the next Federal Reserve chair have surged over the last 24 hours, placing him as clear favorite to succeed Jerome Powell next year. Traders on the Kalshi prediction exchange now see a 54% chance that President Donald Trump will choose the current White House National Economic Council Director to take over leadership of the U.S. central bank when Powell's term ends in May 2026. (MarketWatch)
Where Do Fed Policymakers Stand on a December Rate Cut?
Next month's Fed rate decision could be an unusually close call, though in recent days investors have been leaning their bets toward a cut. Here's a breakdown
of the stances of the 12 policymakers who will vote on Dec. 10.
U.S. Economy Consumer Confidence Fades and Retail Sales Growth Cools
Shutdown-delayed data showed American consumers closed out the third quarter on a cautious footing , while a measure of consumer confidence tumbled in November. Taken together, the new and older data suggest the U.S. economy is heading into the all-important holiday season buffeted by a cooling labor market, continued inflationary pressures and signs consumers were easing their pace of spending and searching for bargains.
U.S. Home Prices Slow Further Amid Affordability Concerns
U.S. home prices rose in September , though the pace of growth continued to slow as elevated mortgage rates and affordability concerns hit demand.
ADP Report: U.S. Lost Average of 13,500 Private-Sector Jobs a Week
Private-sector employers shed an average of 13,500 private-sector jobs a week
in the four weeks ended Nov. 8, payroll processor ADP said in a new report. "Consumer strength remains in question as we enter the holiday hiring season, which might be playing into delayed or curtailed job creation," ADP said.
Government Shutdown Barely Slowed Federal Spending
The federal government was "shut down" for all of October. You can't really tell that from looking at federal spending . The U.S. spent $689 billion during the month, up 18% from October 2024, according to Treasury Department data.
Central Banks Around the World New Zealand's Central Bank Cuts Rates Further to Spark Recovery
The Reserve Bank of New Zealand lowered its official cash rate to 2.25% from 2.50% , bringing the total reduction since mid-2024 to 325 basis points. "The significant reduction in the OCR since August 2024 is expected to support a recovery in economic activity," it said.
BOJ Posts Record Loss on JGB Holdings Amid Tightening Move
The Bank of Japan posted a record loss on its massive holdings of Japanese government debt during the first half of its fiscal year, reflecting its shift toward higher interest rates and the subsequent surge in bond yields. The BOJ said Wednesday that its unrealized losses on JGB holdings amounted to 32.826 trillion yen, equivalent to $210.34 billion, for the six months ending in September. That compared with a Y28.625 trillion loss during the prior half-year period ending in March. The widened loss comes in the wake of the central bank's normalization of monetary policy, which has been pushing up yields on Japanese government bonds. (Dow Jones Newswires)
Financial Regulation Traders Are Flooding Markets With Risky Bets. Robinhood's CEO Is Their Cult Hero.
Risk-taking is back for individual investors, and few people have done more to stoke those spirits than Robinhood Markets CEO Vlad Tenev. Robinhood's trading app makes it easy not just to buy and sell ordinary stocks, but to invest in options, cryptocurrencies and other exotic financial products , even to make sports bets and play the prediction markets.
Forward Guidance Wednesday (all times ET)
8:30 a.m.: U.S. Advance Report on Durable Goods
8:30 a.m.: U.S. Initial Jobless Claims
9:45 a.m.: ISM-Chicago Business Survey
10 a.m.: U.S. New-Home Sales
12 p.m.: ECB President Christine Lagarde speech at Transatlantikpreis ceremony at Steuben-Schurz-Gesellschaft
2 p.m.: U.S. Federal Reserve Beige Book
Thursday
U.S. markets closed for Thanksgiving holiday
Time N/A: Bank of Korea rate decision
3:30 a.m.: ECB's Piero Cipollone speaks at ECRB meeting
7:30 a.m.: ECB accounts of its last monetary policy discussions
Research Reserve Bank of New Zealand's Hawkish Tone Appears Premature
The Reserve Bank of New Zealand has delivered a less dovish than expected policy statement and a higher-than-expected trough in the forecast track for the official cash rate. Combined with a removal of guidance that the bank remains open to further reductions in the OCR meant that the RBNZ decision was taken as hawkish by the market, says Josh Williamson, chief economist at Citi. Still, Williamson says the hawkish tone is premature, and he expects a further 25 basis point rate cut in February 2026 to 2.00% given a yawning output gap. - James Glynn
Norges Bank Could Cut Rates Twice Next Year as Growth Slows
Norwegian mainland GDP growth slowed in the third quarter and supports SEB's call for two rate cuts in 2026, the bank's Norway chief strategist Erica Dalsto writes. Sequential growth in mainland GDP slowed to 0.1% from a downward revised 0.5% in the second quarter. This was slightly below consensus forecasts and even further below Norges Bank's 0.4% estimate. Despite large revisions to historical data skewing the result, weaker-than-expected growth and employment underpins other data which point to some downside risks to Norges Bank's projections, Dalsto adds. "Although this should be encouraging for underlying inflation pressures, unemployment remains low, and we reiterate that wage growth developments will be decisive for rate cut prospects." - Dominic Chopping
Basis Points The number of homes going under contract in the U.S. rose for a third straight month in October, helped by a boost in sales in the Midwest. The National Association of Realtors' pending-home sales index rose 1.9% on month in October to 76.3, the highest level since November last year. (Dow Jones Newswires) Manufacturing activity in the Mid-Atlantic region tumbled in November on weakening business conditions and higher prices paid. The Fifth District Survey of Manufacturing Activity's composite manufacturing index slumped to minus 15 in the month, compared with minus 4 in October, the Richmond Fed said Tuesday. (DJN) About Us
WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by Michael Maloney in New York and Nihad Ahmed in Barcelona.
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
11-26-25 0715ET
