Chances of Fed rate cut rise despite higher November inflation report

Published On Dec 11, 2024, 3:37 PM

Despite a slight uptick in inflation to 2.7% annually for November, market expectations suggest that the Federal Reserve may proceed with a 25 basis point interest rate cut at their upcoming meeting. While the recent increase in inflation is consistent with estimates, it appears insufficient to deter rate cuts. Investors are optimistic about a market rally following the anticipated rate cut, which analysts believe is likely given the current economic indicators and the Fed's cautious approach to adjusting monetary policy.

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The expectation of a rate cut typically leads to increased market activity as borrowing costs lower and consumer spending can rise. This generally benefits sectors like technology and real estate, which are sensitive to interest rate changes.

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