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📰 MILD INFLATION SEEN AS NOT ENOUGH TO MAKE THE FED CUT SOON A benign November PCE inflation reading may not matter much for U.S. monetary policy, Fitch’s Olu Sonola writes. The gauge was a little milder than forecast, with 12-month inflation at 2.4% and the core reading at 2.8%. “The bottom-line is another one or two months of benign inflation prints will not change the hawkish monetary policy pivot that was introduced on Wednesday,” Sonola says. “The Fed is now likely to wait to see how tariff and immigration policy unfolds over the next coming months before we see another rate cut.” CME data show markets pricing the next cut only in May.

December 20, 2024
Frank

MILD INFLATION SEEN AS NOT ENOUGH TO MAKE THE FED CUT SOON

A benign November PCE inflation reading may not matter much for U.S. monetary policy, Fitch’s Olu Sonola writes. The gauge was a little milder than forecast, with 12-month inflation at 2.4% and the core reading at 2.8%. “The bottom-line is another one or two months of benign inflation prints will not change the hawkish monetary policy pivot that was introduced on Wednesday,” Sonola says. “The Fed is now likely to wait to see how tariff and immigration policy unfolds over the next coming months before we see another rate cut.” CME data show markets pricing the next cut only in May.