Strong U.S. economic and inflation data continue to reshape the debate among Federal Reserve policymakers over the pace and extent of interest rate cuts as investors on Friday further downgraded their expectations for a rate reduction at the central bank's December meeting.

The Federal Reserve cut interest rates by a quarter point, the second reduction this year. A combination of strong data and Donald Trump’s return to the White House muddles the outlook on what comes next.

The Federal Reserve cut interest rates by 0.25% on November 7. More interest rate cuts are likely through the end of 2026.