Fed rate cut odds shift as FOMC blackout begins

Group 1 - The Federal Reserve's interest rate expectations are facing uncertainty as the blackout period begins, with the upcoming FOMC meeting on January 28 being crucial for market recalibration [1] - Recent labor reports indicate a surge in layoffs to 1.2 million in 2025, yet the unemployment rate has decreased, and unemployment claims have been surprisingly low [2] - Inflation remains above the Fed's 2% target, suggesting that Chairman Powell is unlikely to cut rates this month, impacting potential borrowers [3] Group 2 - The Federal Reserve operates under a dual mandate that often leads to conflicting goals, where raising rates can lower inflation but increase unemployment, and vice versa [5] - This dynamic was evident last year when Powell faced criticism for not lowering rates sooner to stimulate the economy amid external pressures [6] - Recent comments from Fed officials indicate a moderately restrictive policy stance, with inflation pressures easing and concerns about potential labor market weakening [8]