This week’s two critical reports on the labor market and inflation started setting the stage for the next Fed rate reduction, with their headlines of ebbing employment growth, rising joblessness, and slowing price changes. However, beyond the headlines, questions concerning data quality and other results argued for a more cautious policy approach to begin 2026, compared to the consecutive rate cuts in the final three confabs of 2025. We are sticking to our call for the next action in mid-March, skipping the next meeting in late January. Payroll employment rose by 64k in November, after falling by 105k in October and ... (full story)