2 firm inflation prints just made the Fed's 2025 rate cut path a lot 'murkier'

Published On Nov 14, 2024, 11:01 AM

Recent inflation data indicates that inflation continues at rates that are discouraging the Federal Reserve's anticipated rate cuts in 2025. The core Consumer Price Index (CPI) remained at 3.3% for three consecutive months, while the core Producer Price Index (PPI) rose to 3.1%. These figures suggest persistent inflation, which could lead to a more gradual approach to rate cuts than previously expected. Economists now project the Fed will ease rates by only 75 basis points in 2025, down from earlier expectations of four rate cuts totaling 100 basis points. This outlook has contributed to rising bond yields but has not adversely affected stock market performance, partly due to stronger-than-expected economic data.