LIVE MARKETS-Rescheduling December FOMC meeting could clear data fog - UBS

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RESCHEDULING DECEMBER FOMC MEETING COULD CLEAR DATA FOG - UBS

A rate cut may hang in the balance.

At times, one employment report can completely reset the path of policy. Zero, 25, 50 basis-point rate cuts have rested on single reports, UBS says, adding that whether this sensitivity to single prints is justified is another matter.

Next month, the Federal Open Market Committee is set to receive a slew of delayed economic data, just after its meeting.

UBS says the FOMC meeting is a week earlier than typical and that moving the meeting can add clarity. "Moving a meeting isn't unprecedented, neither is adding them".

With the December FOMC meeting set for the 10th, the earliest since 2003 - there's no formal rule for canceling it, but the Committee can set its own procedures, UBS strategists said.

The Chair, in consultation with members, could agree to reschedule the meeting to 16-17. Given that last year's meeting was on December 17-18, pushing it back a week would not make it unusually late, UBS noted.

This way policymaking in the "fog" could be avoided.

"If the FOMC sticks to a meeting schedule set in August 2024, knowing that key data would arrive a week later, that "fog" would become a choice", UBS added.

Meanwhile, dovish remarks from influential New York Fed President John Williams offered some respite on the policy front last week but were also a reflection on how divided policymakers were ahead of December's FOMC meeting.

Investors are pricing in a nearly 80% chance the central bank will deliver a 25-basis-point interest rate cut next month, compared with 42% a week earlier, according to CME Group's FedWatch Tool.

Global brokerages remain split on whether the central bank will cut interest rates at its December meeting or keep policy unchanged, as mixed signals on job growth and unemployment last week clouded the economic outlook.

(Joel Jose)

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