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The possibility of Fed rate cut in December has increased sharply. This is because the consumer confidence in the United States has dropped towards the all-time low. Data from the University of Michigan showed that its Consumer Sentiment Index dropped sharply to 50.3 in November, marking its second-lowest reading in history. Consumer Confidence Falls Below 2008 Recession Levels According to the Kobeissi Letter, the 3.3-point decline missed expectations of 53.0 and continued a four-month losing streak. The Kobeissi analysts say the fall reflects deepening pessimism about the economy as inflation remains stubborn and job growth slows. US consumer sentiment is collapsing: The University of Michigan’s Consumer Sentiment Index fell -3.3 points in November, to 50.3, the 2nd-lowest in history. This significantly missed expectations of 53.0 points and marks the 4th consecutive monthly decline. Current conditions… pic.twitter.com/1htEqmvRsu — The Kobeissi Letter (@KobeissiLetter) November 8, 2025 Also, a sharp rise in job cuts has intensified pressure on the Fed to deliver a rate cut, deepening investor caution. The index’s current conditions subindex also plunged 6.3 points to 52.3, the lowest ever recorded. Meanwhile, the expectations gauge slipped to 49.0, its third-lowest level since July 2022. Statistics reveal that American households are witnessing a grim economic future. According to The Kobeissi Letter, consumer sentiment now sits below levels seen during past recessions, including 2008. This can result in a drop in expenditure which drives more than two-thirds of the U.S. economic activity. Market Bets on Fed Rate Cut Surge to 71% The collapse in sentiment has already shifted market expectations for monetary policy. Prediction market platform Kalshi shows a 71% probability that the Fed will cut interest rates by 25 basis points in December. Only 26% of traders expect the Fed to hold rates steady, while a small 4% see the chance of…

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Filed under: News - @ November 8, 2025 7:22 pm