With both CPI and PPI reports well within expectations, there is a favorable reception across the broader market spectrum that these reports are a strong sign that the Federal Reverse will begin rate cuts in 2024. A soft landing for the economy is the primary goal of the Federal Reserve, and it would seem their measures have had the intended impact with the Jobless claims seeing a recent new low and many of the primary economic signals pointing to a stable 2024.
Financial Reports
This will be another light week before the next large releases of the CPI and PPI data. The overall unemployment numbers have been trending lower which will likely leave the Federal Reserve board in a state of suspension. They have made many assertive statements they do not intend to cut rates soon, but the signs of a soft landing for the economy are numerous, leading to much speculation about impending rate cuts. As a general indicator, lending partners have seen a near 6 week-to-week decline in lending rates. The largest data releases this week are the U.S. Unemployment Reports and Non-Farm Payroll data releases.
The first week of December’s largest reports are the GDP estimates, which will be the second estimations of the year prior to the final release. The final GDP reports will be after the new year and are the strongest indicator for the economic state of the country.
The numbers: The leading economic index declined 0.8% in October and fell for the 19th month in a row, but the U.S. economy doesn’t appear any closer to a recession than when the losing streak began.
There’s a consistent trend of inflation slowing down which brings a greater potential for the end of any rate hikes from the Federal Reserve, signaling a soft-landing for the economy which has been touted by Jerome Powell. With a soft landing, it does also signal a strong potential for the Federal Reserve to begin lowering rates in the coming future.
The week following the FOMC rate decision meetings are typically very light, with the two most influential releases being the University of Michigan Consumer Sentiment and the weekly Job Claims reports. The more positive news is mortgage lending rates have been on the decline in the last two weeks.
The most important data of the quarter was released, signaling the direction for many markets and where economic policy may be headed. Jerome Powell as well as other members of the Federal Reserve spoke about the state of economic policy, informing many parties about their decisions to remain hawkish or dovish in their approach. Further …