Apollo Global’s Torsten Slok Opposes December Fed Rate Cut Amid Market Expectations and Strong Labor Data

This analysis draws from Torsten Slok’s appearance on CNBC’s “Power Lunch” [1], where he joined former Council of Economic Advisors chair Jason Furman [5] in opposing a December Federal Reserve rate cut. Slok’s position is anchored in strong initial jobless claims data (191k for the week ending November 29, 2025—lowest since September 2022) [2], which signals a tight labor market. A tight labor market can exert upward pressure on wages and inflation, aligning with concerns about the Fed’s inflation-targeting mandate.

Conversely, market participants ascribe a 95% probability of a 25-basis-point cut [3], with major banks including Morgan Stanley (recently reversing its January cut forecast to December) [4], JPMorgan, and BofA supporting the easing expectation. Dovish comments from Fed officials like New York Fed President John Williams, Fed Governor Christopher Waller, and San Francisco Fed President Mary Daly have further bolstered these expectations [4]. The labor market picture is mixed, with strong jobless claims contrasting a weak ADP private sector jobs report earlier in the week [2], contributing to the split in analyst views.

1. The debate underscores a classic monetary policy dilemma: balancing near-term labor market strength (which may fuel inflation) against potential future economic weakness.
2. Market expectations are extremely one-sided (95% probability of cut) [3], meaning a Fed decision to hold rates would represent a significant “hawkish surprise” with broad market implications.
3. Slok’s stance highlights ongoing concerns about inflationary risks, even as markets focus on dovish Fed signals and growth risks.
4. The mixed labor data (strong claims vs. weak ADP) [2] leaves the Fed with no clear consensus signal, increasing the complexity of its decision.

• Risks
  : If the Fed follows Slok’s advice and holds rates, markets could experience significant volatility, including equity declines and bond yield increases, as priced-in expectations are shattered [3]. Conversely, cutting rates amid strong labor data could risk a resurgence of inflation, undermining the Fed’s progress toward its 2% target.
• Opportunities
  : A hold decision could enhance the Fed’s credibility as an inflation fighter, reassuring investors about long-term price stability. A cut, meanwhile, could support interest-rate-sensitive sectors like housing and consumer durables, though this may come with inflation trade-offs.

• Event
  : Torsten Slok (Apollo Global) argued against a December Fed rate cut on CNBC’s “Power Lunch” (December 5, 2025) [1].
• Labor Market Data
  : 191k initial jobless claims (week ending November 29, 2025—lowest since September 2022) [2].
• Market Expectations
  : 95% probability of a 25-basis-point rate cut [3].
• Analyst Split
  : Slok and Furman oppose a cut; Morgan Stanley, JPMorgan, BofA, and markets expect a cut [4][5].
• FOMC Meeting Dates
  : December 9-10, 2025 [4].