In August 2003, Federal Reserve Chair Alan Greenspan kicked off the annual Jackson Hole gathering for economic policymakers with a speech acknowledging the trickiness of steering the U.S. economy through interest rates.

“Uncertainty is not just an important feature of the monetary policy landscape, it is the defining characteristic of that landscape,” Greenspan said at the time. He described the Fed’s job as a constant exercise in “risk management” to ensure both stable prices and full employment, the main responsibilities assigned to the central bank.

Those words can just as easily be applied to the Federal Reserve’s next two-day meeting scheduled for Dec. 9 and 10. For the Fed, it’s shaping up to be another exercise in balancing the clashing risks of a weakening labor market and rising prices while the federal government is still catching up on publishing employment and inflation data reports. 

“To my knowledge, it’s totally unprecedented,” said David Wilcox, a senior fellow at the Peterson Institute of International Economics who helped Greenspan craft his 2003 speech, adding it was “off the charts.” He compared the current situation to a person driving a car with a foggy windshield.

Fed policymakers will be equipped with aging government data, as September jobs and inflation reports are the latest data releases available to them. The Bureau of Labor Statistics canceled the dual October reports and scheduled November’s data releases for mid-December.

Now, Fed chair Jerome Powell must cobble together a majority on the 12-member Federal Open Market Committee that’s deeply split on what direction to take. Opposing wings have bubbled up: One favors lowering interest rates to salvage a sputtering labor market and another prefers to keep them unchanged to avoid sparking price hikes.

“The Fed has become more internally democratic,” David Wessel, director of the Hutchins Center of Fiscal and Monetary Policy at the Brookings Institution, told Quartz. “One Fed President said to me in the Greenspan years, you had the feeling if you talk too much in an FOMC meeting, Greenspan would push a button and an anvil would come down on your head. From [Ben] Bernanke on, it's become much more of a functioning committee.”

What to expect now and in 2026

Investors and financial analysts are expecting the Fed to slash interest rates by another quarter-point, the third and final such cut this year. At the last Fed meeting in October, Powell initially downplayed the possibility of another rate cut this month and called it “not a foregone conclusion.”

That’s not the case any longer. Financial markets got a big sign towards another cut in late November when New York Fed President John Williams — viewed as part of Powell’s inner circle — said he saw “near-term” room for lowering interest rates. 

“John Williams rarely gives signals like this,” Wessel said, adding he believed it was an “unmistakable” one to avoid surprising financial markets that had earlier written off the possibility of a quarter-point cut.

Already, analysts at major banks are placing their predictions for the Fed’s interest rate trajectory next year. Bank of America analysts on Monday projected two rate cuts in the summer of next year. Goldman Sachs is also predicting the same number of rate cuts in 2026. Both banks are penciling in a quarter-point cut in December.

Stat of the week

$6.25 billion

Michael and Susan Dell are donating $6.25 billion for tax-advantaged individual investment accounts meant for kids established under the Republican megalaw this summer. The philanthropic gift from the Dell Technologies CEO and his wife is enough to seed 25 million accounts with $250 each, on top of $1,000 that the federal government is providing.