Fed may pause rate cuts due to hot inflation data, potential impact on markets uncertain.

From Investing.com: 2024-12-17 02:27:00

Last week, Fed officials hinted at a possible pause in rate cuts following hot inflation data. The Wall Street Journal article by Nick Timiraos discusses the shifting game plan for interest-rate cuts. Investors expect a third rate cut this week, but officials may slow down or even halt rate reductions after that. The possibility of a federal funds rate (FFR) cut remains, with potential dissenters arguing against further cuts due to a strong economy, stable inflation, and high asset prices. Analysis shows that current FFR and bond yield levels are not restrictive, suggesting the Fed may not need to take drastic action.



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