The CPI report shows inflation stabilizing, but it’s too soon to call a December rate cut a done deal. The Fed remains cautious, focusing on sustained data trends. With inflation still above 2% and a strong labor market, the Fed is more likely to hold rates steady in December, keeping cuts on the table for early 2024 if data continues to improve.
Can CPI push markets to new highs?
CPI alone is unlikely to drive markets to new highs but creates a favorable backdrop. Stable inflation, paired with a dovish Fed stance or strong corporate earnings, could boost investor confidence. Sectors like tech and consumer discretionary may benefit, but broader market highs will require clear signs of economic growth and sustained optimism.
25 bps is Certain? How Will Rate Cut Dot Plot Affect 2025?
The Federal Reserve will announce a rate decision on Wednesday, Dec. 18. It's expected December will cut another 25 bps. However, economists are now expecting fewer cuts in 2025. The keypoint of this meeting is the dot plot about 2025 rate cuts.
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How do you expect the final rate cut this year?
Will fewer rate cuts in 2025 force the market decline?
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