Close allies have laid the groundwork for Federal Reserve Chair Jerome Powell to push a rate cut through a divided committee at next month’s meeting even though it could draw multiple dissents. One Powell ally, San Francisco Fed President Mary Daly, said in an interview Monday she supports cutting rates in December because she sees a sudden deterioration in the job market as both more likely and harder to manage than an inflation flare-up. Meanwhile, the Fed is struggling to persuade some banks to use a lending tool designed to improve the central bank’s control over short-term money markets. And the federal government plans to release a shutdown-delayed estimate for third-quarter economic growth just before Christmas.

Allies of Federal Reserve Chair Jerome Powell have laid the groundwork for him to push a rate cut through a divided committee at next month’s meeting even though it could draw multiple dissents. The unusual level of division inside the Fed means that, to an even greater degree than usual, the final call rests with Powell. To negotiate these stark divisions, Powell is likely to weigh two approaches. The first is to cut rates, as markets now expect, and use the exquisitely negotiated postmeeting statement to signal a higher bar for further reductions. The alternative is to hold rates steady and reassess in January, when officials will have more of the employment and inflation data that was suspended by a federal government shutdown. 

• Where Do Fed Policymakers Stand on a December Rate Cut?

• Fed’s Waller Calls Again for Rate Cut

Banks have made more use of the standing repo facility over the past month. But there are signs some are reluctant to tap it more aggressively, which would make it easier for the Fed to maintain a firm grip on rates as it winds down its $6.6 trillion asset portfolio. At a recent private meeting, some executives told the New York Fed they worry using the facility would carry a stigma, undermining the tool’s purpose as volatility increases.

The Commerce Department said Monday it will publish its initial estimate of third-quarter gross domestic product on Dec. 23, nearly two months after a first look at the data was initially scheduled. Government statistical agencies are broadly playing catch-up after the shutdown ran from Oct. 1 into mid-November, delaying a bevy of reports economists and policymakers rely on to measure the health of the economy.

8:30 a.m.: U.S. PPI
8:30 a.m.: U.S. Advance Monthly Sales for Retail & Food Services
9 a.m.: U.S. Quarterly House Price Index
9 a.m.: U.S. Monthly House Price Index
9 a.m.: S&P Cotality Case-Shiller Indices
10 a.m.: Richmond Fed Business Activity Survey
10 a.m.: U.S. Consumer Confidence Index
10 a.m.: U.S. Pending Home Sales Index
8 p.m.: Reserve Bank of New Zealand rate decision

4 a.m.: ECB Financial Stability Review
8:30 a.m.: U.S. Advance Report on Durable Goods
8:30 a.m.: U.S. Initial Jobless Claims
9:45 a.m.: ISM-Chicago Business Survey
10 a.m.: U.S. New-Home Sales
12 p.m.: ECB President Christine Lagarde speech at Transatlantikpreis ceremony at Steuben-Schurz-Gesellschaft
2 p.m.: U.S. Federal Reserve Beige Book

President Trump has been looking for someone to blame for all the “affordability crisis” chatter that is dragging on his presidency. On Friday, he came face to face with him in the Oval Office, writes WSJ’s Greg Ip. While the affordability crisis might not be a Democratic “con job,” as Trump once claimed, it certainly dominates the vibes, and no one embodies the vibes better than Zohran Mamdani, who was elected mayor of New York City this month.

But getting elected on vibes is one thing; solving them is another. And that’s the problem with the affordability crisis. What started as a serious but short-lived spike in inflation from 2021 to 2023 has evolved into something broader and more amorphous. Like the climate crisis or the crisis of democratic legitimacy, the affordability crisis has become an umbrella term for countless loosely connected phenomena. Like those other crises, this one defies definition and thus resolution.

With the next Federal Reserve meeting approaching, uncertainty remains high and will likely persist until the decision is announced on Dec. 10, German bank Metzler's analysts say in a note. No game-changing economic data is expected ahead of that date, they say. The market is increasingly pricing a rate cut in December, but volatility could remain high and it wouldn't take much to trigger a market reversal, they say. Unsurprisingly, Governor Waller on Monday supported a December cut, although he does consider a "meeting-by-meeting" approach appropriate afterward. Money market forwards price a 70% probability of a Fed rate cut in December, according to LSEG. — Emese Bartha

The Reserve Bank of New Zealand is expected to cut the official cash rate by 25 bps to 2.25% on Wednesday amid significant spare capacity and a subdued medium-term inflation outlook, say economists at BofA Global Research. The OCR path will likely be lowered by around 45 bps to trough at 2.10% in 1H 2026, they write in a research note. While the economists see a case for a 50bp cut, they expect the RBNZ to opt for a 25bp reduction, given uncertainty about transmission lags from earlier easing, and inflation expectations. The RBNZ will likely signal a data-dependent easing bias, they add. BofA forecasts New Zealand's growth to pick up through 2H 2025 and 2026 but expects spare capacity to persist and core inflation to trough below 2% next year. — Monica Gupta

Singapore's central bank is likely to keep a closer eye on price pressures, Nomura analysts say after seeing another upwards surprise in core inflation. The gauge rose sharply in October, topping expectations for a second month. Noting the broadened increase, Nomura lifts its 2025-2026 core inflation forecasts to 0.7% from 0.5%, and to 2.1% from 1.1%--above the long-term historical average and MAS's view. While MAS's tone was largely unchanged from its prior statement, Nomura thinks it's likely been surprised by the pickup in price pressures. Market talk about tightening policy in 2026 is likely to grow. Nomura sees longer-term risks of MAS gradually tightening FX policy but thinks a hold is more likely at the January meeting, as tt assigns a 35% probability for easing, and 15% for tightening. — Fabiana Negrinochoa

• Texas’s factory sector recorded weaker business conditions in November, as the outlook continued to worsen amid lingering uncertainty. The Texas Manufacturing Outlook Survey’s index for general business activity, released Monday by the Dallas Fed, fell to minus 10.4 in the month, from minus 5 in October. (Dow Jones Newswires)
• Canadian Prime Minister Mark Carney is considering a trip to Washington early next month, which may provide an opportunity to restart talks with the White House about relief from certain hefty tariffs. Carney faces political pressure about his inability to deliver a trade deal with the U.S.
• Canadian factory sales likely fell 1.1% in October, according to an early estimate from Statistics Canada published Monday. This would mark a partial reversal after a 3.3% rise in September, in which sales rose to the highest level in seven months. (DJN)
• The German economy may be showing signs of a life after more than half a decade of stagnation. Europe’s largest economy has suffered a series of recent blows, including a surge in energy costs after Russia’s full-scale invasion of Ukraine, higher tariffs on its exports to the U.S and fierce competition from China in key sectors such as automobiles.
• Confidence among German firms worsened in November, as businesses downgraded their previous optimism of a hoped-for economic boost from the government’s spending plans.
• Economies that escaped from Communism more than three decades ago are at risk of falling into a downward spiral if older voters and political leaders prevent the changes needed to offset the hit to growth from aging populations, the European Bank for Reconstruction and Development warned.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by Michael Maloney in New York and Nihad Ahmed in Barcelona.