The Federal Reserve risks making a decision without crucial data: possible postponement of the FOMC meeting to December?

According to UBS analysis, the December FOMC meeting faces a delicate dilemma: the originally scheduled date for December 10 precedes the release of two key employment reports, which are the most critical data for assessing the appropriateness of further interest rate cuts. This situation creates significant uncertainty regarding the quality of monetary policy decisions.

The market is already speculating about an alternative scenario: a possible postponement of the FOMC meeting by one week would allow the Federal Reserve to access employment data before deliberating. Although this option may seem unusual, history shows that it is not without precedent: in the 1970s, specifically in 1971 and 1974, the U.S. central bank had already adjusted its meeting schedules in response to exceptional conditions.

From a regulatory perspective, the Federal Reserve Act does not impose strict constraints on the timing of decision-making meetings, requiring only a minimum of four meetings per year. This regulatory flexibility provides the legal basis that could support a potential postponement of the scheduled meeting.

What makes this situation even more critical? UBS highlights that historically, even a single monthly employment report has been sufficient to radically change the stance of monetary policy. In this case, the Federal Reserve would face the risk of making crucial decisions based on incomplete information, losing access to two consecutive labor market reports.

If the FOMC meeting were indeed postponed, the effects would be ambivalent: on one hand, short-term uncertainty in markets and business expectations would increase; on the other hand, it could significantly enhance the robustness and reliability of monetary policy decisions, based on a more complete and up-to-date informational basis.