A beat in the November producer inflation data added to expectations that the Federal Reserve would take a slow and steady approach to US rate cuts in 2025.
Earlier in the week, the latest CPI report showed a mild uptick in inflation last month (to 2.7% from 2.6%), but this merely matched estimates and failed to rock the boat too much.
All signs are now pointing to another cut from the Fed at its final meeting of the year next week, but we expect the communications to be hawkish.
This is likely to entail an upward revision to the FOMC’s ‘dot plot’, indicating that committee members expect a shallower pace of cuts in 2025 than had been previously expected.
There’s no tier-1 economic news out of the US today, so expect the dollar to be driven by expectations for next week’s Fed announcement.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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