Hello everyone, I'm Penny.
The Federal Reserve will hold its last meeting of 2024 today. The Fed is expected to make some important announcements after the meeting. There is a high chance of announcing a 25 basis point rate cut. Let’s analyze the scenarios.
Fed expected to cut rates again
Karsh said there is at least a 96% chance that the Federal Reserve will announce a 25 basis point rate cut today.
The Federal Reserve has implemented at least two interest rate cuts this year. Once a new round of interest rate cuts is implemented, the total number of interest rate cuts in 2024 will be as high as 100 basis points.
US inflation gauge rises again
Inflation pressures have risen sharply in recent months, complicating the Federal Reserve’s efforts to stabilize the economy.
At the beginning of this year, the US CPI index fell to 308.417 points, rose to 313.55 points in April, and hit an annual high of 315.66 points in October, but fell slightly to 315.49 points in November.
In January 2024, the US Producer Price Index was 142.683 points. In June, the index reached 144.834 points. Since June, the index has continued to grow. In November, the index hit a year-high of 146.493 points.
At the beginning of the year, the U.S. personal consumption expenditure price index was around 122.115 points. It hit a high of 123.234 points in April. It has been rising steadily since June, reaching 123.931 points in September, and climbed to a monthly high of 124.266 points in October.
U.S. Labor Market Challenges
The deterioration of the U.S. job market is the main reason policymakers are considering cutting interest rates. Although the job market initially showed some improvement, it has begun to weaken recently.
On November 30, the U.S. initial jobless claims index was 224,000. In the first week of December, the index rebounded to 242,000, reaching the level of at least 8 weeks ago.
On November 23, the U.S. Continuing Unemployment Claims Index was 1.87 thousand. On November 30, the index soared to 1.89 thousand.
The new US government will move into the White House at the end of January next year. The main challenge facing the new government will be to balance inflation control and economic growth.
I am Penny, a long-term coin hoarder. I don't touch contracts or use leverage. I earn coins in a bear market and U in a bull market.
If you are also such a person, then you are welcome to follow Penny. Let us go through bull and bear markets together, keep each other warm, and strive to be a thicker leek.