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US ECONOMY LOOKS UPBEAT BEFORE THE DEC FOMC MEET

ADMIN || 10th December 2025

There were three data points Tuesday that back the pro-growth narrative, two macro and one company-specific. First, well before the market open we saw the NFIB Small Business Optimism survey ticked up above expectations, with small firms seeing higher sales and greater hiring. Markets also received the JOLTS labor market survey, with its upside job openings surprise. On the companies front, President Donald Trump decided to let Nvidia sell its H200 chips to China.

But the devil is in the details. Nvidia closed down on the day despite the news and the Nasdaq gain. And along with higher job openings, the JOLTS survey also showed higher layoffs and lower quits, both signs of a weaker job market. The last several Fed beige books contain language consistent with a weak growth and inflation outlook.

So now we wait to see what the Fed says once it cuts rates as is so strongly expected. Ironically if it follows the beige book and the weak details of the JOLTS survey, that can help stocks rally. That’s because if officials heed those signals we would see expectations for more cuts next year in the dot plot. Which would help put back in the 6bps of cuts through April 2027 taken out of swaps markets today. If we get the sort of hawkish cut markets seem to be nervously awaiting predicated on economic re-acceleration, stocks and bonds will sell off.

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