An unprecedented Fed pass

By: Macro Strategy Team

December 8, 2025

By: Macro Strategy Team

Macro Strategy Team

For all the volatility in the macro environment, disagreement across the FOMC and public criticism of the central bank, the Fed in theory is still very predictable.

So, with Fed fund futures discounting 23bps of easing at the December meeting it is highly unlikely that the Fed will not deliver.

Looking back to 1994 at all the Fed meetings where rates were left on hold, there are no instances of market discounting such a sizeable move, in either direction.

In short not delivering a cut this week would mark one of the biggest surprises in recent Fed history.

Author Bios

Macro Strategy Team

The Macro Strategy team provides cross-asset research and market intelligence across developed and emerging economies. Their expertise in FX, equities, and fixed income is complemented by proprietary indicators on investor behavior, inflation, and sentiment—turning complex data into actionable insights that help clients anticipate risks and capture opportunities.

1. Peter L. Bernstein Award for Best Article in an Institutional Investor Journal in 2013; Bernstein-Fabozzi/Jacobs-Levy Award for Outstanding Article in the Journal of Portfolio Management in 2006, 2009, 2011, 2013 (2), 2014, 2015, 2016, 2021; Graham & Dodd Scroll Award for article in the Financial Analysts Journal in 2002 and 2010. Roger F. Murray First Prize for Research Presented at the Q Group Conference in 2012, 2021, 2023. Harry M. Markowitz Award for Best Paper in the Journal of Investment Management in 2022, 2023. Doriot Award for Best Private Equity Research Paper in 2022.