Two 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 shows increasing prices, with the core Consumer Price Index (CPI) and the core Producer Price Index (PPI) both reporting gains above expectations. This persistent inflation complicates the Federal Reserve's plans to adjust interest rates in 2025, casting doubt on the scale and pace of potential rate cuts. Economists anticipate a slower easing of rates than previously projected, and market expectations have shifted significantly, now considering the possibility of fewer rate cuts due to the resilience of economic growth.

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Given the uncertainty around the pace of rate cuts by the Federal Reserve and the potential for persistent inflationary pressures, financial markets are adjusting cautiously. This could lead to increased volatility in equity prices, especially in interest-sensitive sectors.

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