The Federal Reserve’s next decision is five weeks away, but this week is doing much of the deciding. Two early prints have already landed on the hawkish side, and three more tests arrive before Friday.

At the Fed’s October 28 meeting, policymakers held the federal funds target at 3.75% to 4.00% in a 10–2 vote, with Lisa Cook and Beth Hammack dissenting in favour of a hike. Since then, traders have priced roughly a three-in-four chance of a quarter-point increase at the December 8–9 meeting. This week will show whether the data justifies that pricing — or punctures it.

Two prints in, both hawkish

The week’s first test came on Monday, when the Institute for Supply Management reported that its Manufacturing PMI rose to 55.5 in October, up from 54.5 in September and above the consensus of about 54.5. It was the tenth consecutive month of expansion, and the details were stronger than the headline: Production jumped to 59.0, its highest since November 2021; new orders held at 55.5 and employment stayed in expansion at 52.4.

There was a dovish footnote. The Prices Index fell to 75.2 from 77.9, and two-thirds of survey comments were negative — many citing pricing volatility, tariffs and the war in the Middle East. Even so, ISM said the reading corresponds to annualised real GDP growth of about 2.7%.

Tuesday brought the second test. The Bureau of Labor Statistics reported 7.52 million job openings in September, up from a revised 7.19 million in August and well above the consensus of roughly 7.1 million. Hires rose to 5.4 million, quits to 3.4 million (a 2.1% rate, up from 1.9%), and layoffs fell to 1.64 million, their lowest since March 2025.

Two caveats matter. First, the BLS itself described the openings change as “little changed” under its statistical-significance standard, and the survey’s low response rate makes any single month noisy. Second, openings measure demand for workers, not hiring itself: September payrolls grew by just 29,000.

Data Week Scorecard: what is in, what is still to come

So far: two beats out of two.

Today’s double test: ADP and services

Wednesday brings two releases in the same morning. The ADP Employment Report, due at 8:15 a.m. ET, is expected to show private employers adding about 65,000 jobs in October, down from 90,000 in September. ADP imperfectly previews Friday’s payrolls, but a sharp miss either way would move December pricing before the ISM release lands.

The ISM Services PMI, due at 10:00 a.m. ET, is the bigger of the two. Services dominate the U.S. economy, and September’s report carried a warning the Fed cannot ignore: the headline was a healthy 54.9, but the Prices Index stood at 74.0, and the Employment Index barely held expansion at 50.1. Consensus looks for a headline of about 54.8. What matters more is the split inside it: if prices stay near 74 while employment slips below 50, the Fed faces the same dilemma it has faced all autumn — inflation too hot to cut, growth too soft to hike with confidence. If both hold up, the hawks’ case strengthens further.

The case for a hike — and the case against

The hawkish case, in one sentence, is that nothing in the data is breaking. Growth is running near 2.7% on ISM’s mapping, factories are expanding for a tenth month, job openings are at their highest since May, and September inflation — CPI at 3.7%, core PCE at 3.1% — is still well above the Fed’s 2% target. Two dissenters already wanted a hike in October; a December move would be the majority catching up. Markets price a hike at roughly 75%, not 50%.

The dovish case is subtler but real. Payrolls grew by only 29,000 in September, and July and August were revised down by a combined 60,000. The JOLTS beat came with the BLS’s own “little changed” qualifier, and two-thirds of ISM comments were negative. December also brings a new Summary of Economic Projections — a fresh rate path, not just a decision. A committee that hikes into softening payrolls, with unemployment already at 4.2%, risks owning a policy error in print.

There is also a timing quirk worth noting. The November CPI report is not due until December 10 — the day after the December meeting ends. When the Fed votes on December 9, it will have no November inflation data at all. The labour data this week is therefore the last full read on the economy the committee will get before it decides.

London adds a global echo

On Thursday, the Bank of England is widely expected to raise Bank Rate to 4.00% from 3.75% — its first increase since August 2023. A Reuters poll found 54 of 63 economists expecting the move, and markets price it at more than 90%. The trigger is familiar: UK CPI rose to 3.5% in September, its highest in 11 months, pushed by energy costs.

The Bank of England’s decision matters for the Fed’s story in two ways. First, it confirms that the global tightening impulse of 2026 is not a one-country phenomenon — inflation is proving sticky on both sides of the Atlantic at the same time. Second, the vote split and the new forecasts will show whether a central bank can hike while openly worrying about growth. If Bailey hikes and signals more to come, Washington’s hawks gain cover; if he calls it a one-off, the doves gain an argument that even hawkish banks see this as a precaution, not a cycle.

What to watch next

Three markers decide how this week ends. First, today’s ADP and ISM Services prints: a combined beat would push December hike odds toward 80%. Second, Thursday’s Bank of England vote split — a 7–2 vote for a hike, as the Reuters poll suggests, reads very differently from a 5–4 squeaker. Third, Friday’s payrolls: consensus looks for 55,000 to 65,000 new jobs, unemployment steady at 4.2%. Below 40,000 would revive the growth scare; above 100,000 would all but lock in December.

Two out of two data beats is a start, not a verdict. But if the rest of the week follows the same pattern, the December meeting will not be a debate about whether to hike. It will be a debate about how many more hikes follow.

This article is for information only and does not constitute financial advice.