The Federal Reserve is experiencing internal divisions as it approaches its December meeting, with policymakers split on whether to focus on inflation risks or a weakening labor market. The federal funds rate is currently set at 3.75%–4% following two recent cuts, but the path forward remains contentious. A government shutdown has delayed critical economic data, further complicating the decision-making process. Chair Jerome Powell is working to manage market expectations to maintain committee cohesion. Financial markets currently estimate a 60% probability of a rate cut in December, though increased volatility is anticipated if hawkish members gain sway. Options being considered include a modest rate cut with tighter guidance or delaying any changes until January.