The Fed steals the spotlight for the last time this year as it waits for another rate cut

If this week has been that of the ECB, the next will be marked by its counterpart on the other side of the Atlantic: the United States Federal Reserve. The The Fed has its last meeting of the year on December 18. At this meeting, the market expects to find the last interest rate cut in 2024 in which an adjustment of 25 basis points is expected. However, the market will also look for clues in the speech of the president of the institution, Jerome Powell, about his plans for the dollar reference for next year.

The chief US economist at DWS, Christian Schermann explains that “Lately, the data received has been somewhat mixed. While labor markets appear to be in a volatile smoothing pathinflation in particular continues to behave stubbornly.” However, the firm also considers that “the disinflationary advance registered to date keeps some additional rate cuts on the table, but at the same time we hope that central bankers slow the pace of cuts after the December meeting,” according to Schermann.

Also in the US, the final data on the Gross Domestic Product will be published on Thursday, for which no changes are expected with respect to the 2.8% previously announced.

Beyond the US market, the end of the year will bring with it the last meeting of other central banks of reference for the West. The person responsible for the Japan’s monetary policy and the United Kingdom have scheduled meetings to review their monetary policy. Although, the consensus of analysts gathered Bloomberg does not expect changes in the price of money for the Central Bank of Japan, it would leave its reference at the current 0.25%, on the United Kingdom side an upward adjustment is expected in line with the last movement announced by the European Central Bank.

However, the Japanese economy continues to show signs of overheating with a rising inflation which may motivate a change by the Bank of Japan at the last minute. At the weekly close, the national CPI will be updated, which is expected to increase to 2.9% (previous reference at 2.3%), according to market consensus.

On this side of the Atlantic, in terms of inflation, the eurozone will update the Consumer Price Index (CPI) for the month of November next Monday. This data will be accompanied by the PMI of the region.

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