Macroeconomic Outlook for Next Week: Fed Rate Cut in December Seems Inevitable

After a series of mixed data released this week, swap traders have reduced their bets on the Fed's easing policy path.

The Dow Jones fell a total of 1.82% this week, the S&P 500 declined 0.64%, ending a three-week streak of gains, while the Nasdaq rose 0.34%.

Bitcoin has risen for seven consecutive weeks, marking its longest streak since 2021.

The last significant monetary policy week of 2024 will draw the attention of investors.

According to statistics, at least 22 central banks, accounting for two-fifths of the global economy, will determine borrowing costs by next Friday's close. The outcome is likely to highlight that, as policymakers weigh different risks for the coming year, the momentum for easing policies now appears increasingly unbalanced. Here are the key points the market will focus on in the upcoming week:

Monday 15:30, ECB President Lagarde speaks;

Tuesday 04:45, Bank of Canada Governor Macklem speaks;

Thursday 03:00, Fed announces interest rate decision and economic projections summary;

Thursday 03:30, Fed Chair Powell holds monetary policy press conference;

Thursday (exact time TBD), Bank of Japan announces interest rate decision;

Thursday 14:30, Bank of Japan Governor Ueda Kazuo holds monetary policy press conference;

Thursday 21:30, U.S. Q3 real GDP annualized quarter-on-quarter revision, U.S. Q3 real personal consumption expenditures quarter-on-quarter preliminary, U.S. December Philadelphia Fed Manufacturing Index.

It is worth mentioning that the Fed's preferred core inflation measure—the Personal Consumption Expenditures Price Index (PCE)—will be released next Friday. Economists predict that the November PCE (excluding food and energy) may rise by 0.2%, the smallest increase in three months. This report will also show robust growth in consumer spending and income, indicating economic resilience.