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Doves, Hawks, and Your Money All Walk Into The Fed’s December Meeting

Author

Noah Zelvis
December 07, 2025

The Fed’s big December 10 meeting is shaping up like market nerd Super Bowl: some voters want another cut to protect a wobblier job market, others want to tap the brakes with inflation still warm, and fresh ADP data showing private hiring actually dropped in November just poured more fuel on the debate. 

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On paper, this should be a simple call: hiring is slowing, small businesses are feeling the squeeze, and the Fed has already cut rates twice since September to give the economy some cushion. But the December meeting is messy because the leaders around the table do not see the world the same way.

On one side of the room, you have the “let’s cut again” crowd. They are focused on the labor market: ADP says private employers shed 32,000 jobs in November, a sharp swing from gains in October, with small businesses losing the most. That lines up with more reports of longer job searches, softer hiring plans, and owners trying to trim costs anywhere they can. To the doves, another small cut now is cheap insurance against a deeper slowdown later.

In the middle, there is a big “we’re not sure yet” block. These folks are watching every scrap of data, but the official government jobs report is delayed until mid-December thanks to the recent shutdown. So the Fed is flying partly on private indicators and vibes when it votes on December 10. That makes them nervous about making a big move based on incomplete information.

On the other side, you have the “hold up” crew. They see inflation still above the Fed’s comfort zone and worry that easing too fast could undo progress. From their angle, markets have already priced in a lot of good news, stocks are near highs, and there is no emergency that forces a hurry-up cut.

Put together, you get a very tight vote and a wide range of possible outcomes: a quarter-point cut, a hold with soft guidance about future cuts, or a very hedged statement that tries to please no one and annoys everyone. That is why next week is basically Fed Investor Day for markets—every word in the statement and press conference will get picked apart.

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Actionable Stuff

  • Do not bet the farm on one meeting. The Fed’s decision is important, but it is not your whole portfolio thesis.

  • Favor strong balance sheets. Slower hiring and cautious small businesses mean weaker players break first. Stick with companies that can ride out a softer patch.

  • Look for “good news either way” setups. Rate-sensitive names that benefit from cuts but are not wrecked if the Fed waits can be your sweet spot.

  • Keep some cash handy. A surprise hold or a more aggressive cut could both spark volatility. Having dry powder lets you buy the overreactions.

  • Borrowers: check your rate mix. If you carry adjustable-rate debt, think about how another cut (or a delay) hits your payment and plan ahead instead of hoping.

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Top Picks

Robert Half (NYSE: RHI)

If you want a real-time pulse on the job market, staffing firms like Robert Half feel it first. When companies get nervous, they slow permanent hiring and lean more on contract work; when they feel better, they bring in more help and eventually convert temps to full-time. That makes RHI a clean way to play a world where hiring is cooling but not collapsing.

Right now, businesses are clearly cautious. ADP’s numbers show small firms cutting jobs, and executives are trying to squeeze more out of existing teams. That is not great for staffing demand in the short term.

But it sets up a nice optionality trade: if the Fed cuts again and sentiment stabilizes, hiring can rebound from a low bar, and Robert Half’s placements can pick up faster than the broader economy.

You’re not banking on a job-market boom here. You’re owning a levered bet on “things stop getting worse,” with a disciplined operator that has been through plenty of cycles.

KeyCorp (NYSE: KEY)

Regional banks live at the intersection of rates and real-economy vibes, and KeyCorp is a solid example. Higher rates have been squeezing funding costs for a while, and a softer job market is not exactly great news for loan growth.

But a Fed that is close to the end of its cutting cycle—and might trim once more—can actually be helpful if it steadies deposit flows and credit worries.

If the Fed delivers another modest cut, it can relieve some pressure on borrowers without wrecking bank profitability.

If the Fed pauses but signals patience, that still gives KeyCorp time to adjust its balance sheet and pricing.

Either way, you have a lender with a diversified footprint, a focus on bread-and-butter business and consumer banking, and plenty of experience managing through choppy cycles.

This is not a “rates to zero” rocket ship trade; it is a steady way to participate if the Fed manages a soft-ish landing instead of slamming the brakes or the gas.

Rocket Companies (NYSE: RKT)

Mortgage players like Rocket are basically rate-sensitive amplifiers. When borrowing costs fall, even a little, refi chatter starts up, more buyers poke around listings, and application volumes perk up.

When rates stay high, everyone sulks. That dynamic makes Rocket a natural name to watch into a “cut or no cut” Fed week.

The housing market is still dealing with affordability issues, but every quarter-point move down helps unlock a few more buyers and refi candidates.

If the Fed cuts again or hints at more easing in early 2026, mortgage rates could drift lower and bring more business through Rocket’s digital funnel.

If the Fed holds but sounds cautious about the labor market, expectations for future cuts can still support sentiment.

You don’t need a repeat of the pandemic housing frenzy for Rocket to benefit. You just need a slow thaw and a Fed that is closer to easing than hiking, which is exactly where we are.

Paylocity (NASDAQ: PCTY)

Paylocity lives right where payrolls, HR, and software meet—which is perfect for this moment. Its tools help mid-sized companies run payroll, manage benefits, and keep track of their people, which means Paylocity’s revenue is tied to headcount but cushioned by sticky subscriptions.

When hiring slows, customers might add seats more cautiously, but they are not ripping out core payroll software. And if the Fed nudges rates a bit lower and confidence edges back, new-seat growth can start to normalize without Paylocity ever having fallen off a cliff.

The company also keeps layering on new HR features, which deepens relationships and makes it harder to switch away.

For a Fed-watcher portfolio, this is a nice “steady-eddy plus upside” play: you get exposure to labor-market trends without taking on the full cyclicality of a pure staffing or cyclical industrial name.

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Bottom Line

The December 10 Fed meeting is less about “will they blink” and more about “how nervous are they about jobs.” Doves are pointing to weaker private hiring and a rough year for small businesses, hawks are still staring at inflation, and the data fog from the shutdown only makes the call trickier.

That’s it for today’s edition—thanks for reading! Reply to this email with any feedback or let me know which macro trends or markets you’d like me to cover next.

Best Regards,
—Noah Zelvis
Macro Notes