Expectations for a 2025 Fed rate cut rise as preferred indicators show slowing price pressures
The US Federal Reserve's preferred inflation indicator showed a moderate performance in November, which is a step in the right direction for policymakers seeking further rate cuts by 2025. These data should help alleviate the Fed officials' concerns about the inflation outlook. Fed officials released their latest forecasts this week, showing that prices and interest rates will be higher in 2025. These new forecasts have triggered a sell-off in US stocks, as investors have already digested the prospect of policy tightening. Details on prices show a widespread slowdown in inflation. The core services price (a closely watched category, excluding housing and energy) rose 0.2% month-on-month, the lowest level since August. Core goods prices (excluding food and energy) declined for the first time in three months.
