Inflation Ticks Up, but Details Are Encouraging for the Fed
Published On Dec 11, 2024, 5:04 AM
Recent inflation data shows a slight increase of 2.7% for the year ending November, up from 2.6% in October. However, there are signs of cooling inflation, particularly in housing costs, which may lead to slower price increases in the future. This data is expected to give the Federal Reserve enough confidence to lower interest rates in their upcoming meeting. Though inflation remains above the Fed's target of 2%, it has markedly improved from the peak of 9.1% in 2022.
Stock Forecasts
SPY
Positive
The easing inflationary pressures, particularly in the housing sector, suggest a possible stabilization in the economy, with lower future interest rates potentially boosting consumption and investments.
XLF
Neutral
While the Fed is expected to cut interest rates due to the cooling inflation, there may be a cautious approach where economic uncertainty lingers, possibly limiting aggressive growth in interest-sensitive sectors.
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