Federal Reserve Bank of Canada President Tom Daly expressed support for a December rate cut, subsequently raising the probability of a December rate cut to 81%.

PANews reported on November 25th, citing the Wall Street Journal, that San Francisco Federal Reserve President and 2027 FOMC voting member Mary Daly stated her support for a rate cut next month, arguing that a sudden deterioration in the labor market is more likely and harder to control than a sharp rise in inflation. In an interview on Monday, she said, "I'm not confident we can get ahead in the labor market. The labor market is already fragile enough; the risk lies in non-linear changes." She indicated that the risk of an inflationary surge is lower by comparison, as tariff-driven cost increases are much more moderate than expected earlier this year. Daly's views are noteworthy, as she rarely disagrees with Fed Chairman Jerome Powell in public, despite not having a vote on monetary policy this year. At the December 9-10 meeting, Daly is likely to play a key role in resolving the division within the interest rate-setting committee regarding whether to cut rates or pause rate hikes.

Following Daly's remarks, CME's FedWatch tool showed an 81% probability of a 25 basis point rate cut by the Fed in December (up from 69.4% yesterday), and a 19% probability of keeping rates unchanged. The probability of a cumulative 25 basis point rate cut by the Fed by January next year is 65.2%, the probability of keeping rates unchanged is 14.1%, and the probability of a cumulative 50 basis point rate cut is 20.6%.