🏦📉 Fed Holds Rates, Sees Cuts Soon
Hi everyone,
Yesterday I had a day where nothing was really going my way. I was unproductive - the intent to create something was there, but at the end of the day nothing came out. I felt bad because I could have spent the day outside instead of just sitting in my room staring at a screen or going back and forth between my computer, Instagram, and Tik Tok. I also didn’t hear back from the people I wanted to hear back from, which hurt, but it’s not like it’s something I can control, and in general just had a negative attitude about the entire day.
Looking back on yesterday, I realize that not every day is going to be productive, and not every day is going to be a “great day”. There will be ebbs and flows throughout your week and your months, and often times your bad days can linger for quite a bit. That’s life. I’ve been working on changing my mentality for today, acknowledging and accepting that yesterday wasn’t great, but that doesn’t mean too much in the grand scheme of things. After all, my problems are definitely “first world problems”, and I should be grateful for that.
Anyway, if you’re having a tough day today - don’t fret, it shall pass, and if you’re having an amazing day, well… CONGRATS! Bastard… Just kidding 🤣
We have a great edition for you this week, enjoy!
- Humphrey, Rickie & Tim
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The Weekly Brief
1. Fed Holds Rates Steady and Sees Cuts Next Year (WSJ)
The Fed held interest rates at its latest policy meeting and signaled inflation had improved more rapidly than anticipated.
Most officials penciled in three rate cuts in 2024.
The projections from the meeting were that rates would be lowered to around 4.6% by the end of 2024, equivalent to a 75bps reduction.
Officials were careful, however, not to rule out higher rates in their policy statement.
“No one is declaring victory. That would be premature,” said Fed Chair Jerome Powell at a news conference.
2. Inflation Slowed to a 3.1% Annual Rate in November (CNBC)
The consumer price index increased 0.1% in November and is up 3.1% from a year ago, according to the Labor Department.
The latest CPI data was more or less in line with expectations, further easing pressure on the Fed.
While the November data is still above the Fed’s 2% target, progress is being made.
Energy decreased by 2.3%, as gasoline fell 6%. On the year, energy is down 5.4%.
Food prices increased 0.2% in the month and 2.9% year to date.
Shelter prices (1/3 of the CPI weighting) increased 0.4% for the month and 6.5% for the year.
The release comes as the Fed begins its two-day policy meeting, where it is expected that rates will hold steady.
The futures markets indicate expectations for the Fed to ease in 2024, cutting rates up to 1.25bps by the end of the year.
3. The Fed Won’t Move Too Early and Risk Massive Inflation, Says Michael Milken (CNBC)
Famed investor Michael Milken expects the Fed to move slowly on easing rates.
“History, as you know, repeats in different ways,” Milken said. “In the ’70s, the Fed moved too early. And so yes, we came out of that ’74, ’75, ‘76 period. But we had massive inflation at the end of the ’70s once again, with overnight rates up to 21%.”
Investors will be reviewing Jerome Powell’s latest monetary policy decision today for signs of when the central bank is expecting to cut rates.