Posted 1/10/2024, 7:48:46 PM
Key Inflation Report Due Thursday; Markets Eyeing Fed Rate Cut Prospects
- December CPI report due Thursday, expected to show slight increase in inflation to 3.2% annually. Core inflation seen falling to 3.8%.
- Report will give clues on potential for Fed interest rate cuts if inflation is slowing. Markets pricing in rate cuts starting in March.
- Key areas to watch car prices, airfares, shelter costs. Goldman Sachs sees airfares rising but car prices and shelter costs falling.
- Despite market expectations for cuts, Fed officials tentative on rate cuts for now, wanting to see more inflation progress.
- Upside surprise to inflation not fully priced into markets so could see volatility in reaction if inflation comes in hot.