✅Latest news today San Francisco Federal Reserve President Mary Daly said she is “very comfortable” with policymakers’ median expectations for two possible interest rate cuts next year, suggesting the central bank could take a slower approach Earlier this week, Federal Reserve officials signaled they would significantly slow the pace of interest rate cuts next year after lowering borrowing costs three times in a row. The latest cut, which Daly described as a tough call, lowered the federal funds rate to a range of 4.25% to 4.5%. Policymakers expect they may cut rates only twice more in 2025 amid slow progress in bringing inflation down to their 2% target and continued strong hiring in the labor market. Daly pointed to recent data, rather than policies proposed by President-elect Donald Trump, as the basis for her new economic forecasts.
✅Inflation rises less than expectedThe comments came before the release of data from the US Federal Reserve's inflation index, as the US Department of Commerce reported on Friday that the core personal consumption expenditures price index rose 2.8% from a year earlier in November, the same figure as in October, while experts had estimated a 2.9% increase.
The core PCE price index rose 0.1% month-on-month in November, below analysts' expectations of 0.2% and below the previous reading of 0.3%.
The core personal consumption expenditures price index rose 2.4% on an annual basis, below experts' expectations of a 2.5% increase.
On a monthly basis, it recorded an increase of about 0.1%, less than experts’ expectations of 0.2%, after the index recorded an increase of 0.2% in October.
Federal Reserve officials use the personal consumption expenditures measure as a key baseline for measuring inflation, which continues to exceed the central bank's 2% target over the long term.
Some economists believe the plans put forward by the incoming Trump administration could lead to higher inflation, further complicating the situation. Federal Reserve Chairman Jerome Powell said at a post-meeting news conference on Wednesday that some of his colleagues have begun to factor potential changes in fiscal policy into their forecasts.
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