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In this issue

Results: Will the Fed raise rates at its December meeting?

• Average reader forecast: 32%

• Your forecast: [110523 GOES HERE]%

No more interest rate hikes in 2023?

Just after I’d written and scheduled this past weekend’s email on inflation and the Fed, we got new jobs numbers—and they suggested the job market was starting to cool. Fewer people are working than were the month prior.

These numbers are often revised later on and so no single data point deserves too much scrutiny. But if next month brings similar data and no major revisions, it would bolster the case for the Fed to keep rates constant at its December meeting. And that’s what most of you think will happen:

The average reader forecast is a 32% chance of a rate hike in December; the median is 30%. On Good Judgment Open the crowd forecast gives just a 13% chance of another hike in December. The prediction market Kalshi says just 8%.

The case against another rate increase comes from both the slowing job numbers and the steady decline in inflation, as several readers laid out:

On the other hand, consumers are still spending and still have not exhausted the savings built up during the pandemic:

If rates have peaked or are nearly there, the next question is how long higher rates will last. The “higher for longer” scenario could be painful for lots of companies and households, argues The Economist this week. Unfortunately, that’s the scenario markets now think is most likely.

58% of you answered this week's trivia correctly. Jerome Powell is an admitted Deadhead.​