Drew Angerer / Getty Images
Just as we grew accustomed to the likelihood of a third federal rate cut in December, some inflation data and a host of other factors led some on Wall Street to call for the Federal Reserve to hold off in December and perhaps wait until the first meeting in 2026. However, last week, we witnessed the most alarming piece of data we had seen in some time: a staggering 153,074 job cuts, the highest in over two decades, driven by the adoption of artificial intelligence (AI) and cost-cutting measures. Major tech and retail giants, including Amazon (NASDAQ: AMZN), UPS (NYSE: UPS), Intel (NASDAQ: INTC), and Target (NYSE: TGT), have announced significant layoffs. This in turn sparked Federal Reserve Governor Steven Miran to make a forceful case for a half-percentage-point interest rate reduction at the Federal Open Market Committee’s December meeting, arguing that recent economic indicators justify more aggressive monetary easing.
With the dreadful layoff numbers from last month, the tables appear to have turned for a 50-basis-point rate cut in December.
While most continue to predict a 25-basis-point cut, if any, more negative economic data between now and the end of the month could tilt the scales.
Either way, continued rate cuts of any size could prove to be a solid tailwind for dividend stocks, especially those with higher yields, such as the 7% variety.
If you’re thinking about retiring or know someone who is, there are three quick questions causing many Americans to realize they can retire earlier than expected. take 5 minutes to learn more here
Governor Miran went on to add that core PCE inflation has declined substantially toward the Fed’s 2% target while unemployment has ticked upward in recent months. He emphasized that the central bank should move preemptively to support economic momentum rather than risk waiting too long and allowing conditions to deteriorate further, while acknowledging that some of his colleagues on the committee prefer a more cautious quarter-point approach. He also said…
..
