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MERRY CHRISTMAS AND HAPPY HOLIDAYS

The PCE Index, or the primary inflation indicator of the Federal Reserve, posted a nominally lower reading than expected, a print that assuaged some worries about inflation. Equities trimmed some of their weekly losses and Treasuries rallied nominally across the curve. Historically Christmas week is a positive week for all markets, albeit on low volume … Read more

FED MEETING COMMENCES TODAY

Markets are pricing over a 90% probability of a 0.25% cut in the Fed Funds rate tomorrow.  There is also widespread agreement that this will be accompanied by forward guidance suggesting fewer cuts in 2025 than previously indicated.  It is also expected that FRB Chair Powell will not close off his options for a January … Read more

TWO DAY FED MEETING COMMENCES TOMORROW

Tomorrow is the commencement of a two-day FOMC meeting.   It is widely expected the Central Bank will lower the overnight rate by another 0.25%, bringing the benchmark rate down to a range of 4.25% to 4.5%.  That would mark a full percentage point of reductions since September. Rate cuts are forecasted to slow next year, … Read more

PPI AT 8:30

The CPI rose at a “firm” pace that met expectations, solidifying expectations for the Federal Reserve to cut interest rates next week.  It is also additional evidence that the battle against inflation has stalled. The core CPI rose by 0.3% for the fourth straight month.  From a year ago it rose 3.3%.  The headline number … Read more

CPI RELEASED AT 8:30

Markets were quiet unwilling to make any significant moves ahead of key inflation data released today and tomorrow.   Bank America writes “the market is pricing in the smallest implied reaction to the CPI since 2021.” Consensus is expecting a 0.3% increase in both the headline and core CPI.  Year over year, the CPI is forecasted … Read more

ALL MARKETS WERE QUIETLY LOWER

All markets were quietly lower yesterday for a myriad of reasons.  Market leader NVDA slid as China opened a probe over suspicions the chipmaker broke anti-monopoly laws.  Concerns that Middle East tensions could further escalated given the unexpected toppling of the Syrian government.  To more mundane topics such as tomorrow’s release of November’s CPI that … Read more

NOVEMBER’S JOBS DATA WAS MIXED

Treasuries rallied on Friday as the November employment data was mixed.  At the time of this writing, futures are suggesting an 80% probability the Federal Reserve will ease at its December 18 meeting.  The market has almost priced in three rate cuts during 2025, virtually unchanged from the day before the data was released The … Read more