Fed Signals Pivot to Easing Rates as Inflation Cools, Raising Hopes of 'Soft Landing'
• The Federal Reserve unexpectedly signaled it is nearly done raising interest rates and plans to cut rates in 2024, boosting hopes it can cool inflation without causing a recession.
• Inflation is falling faster than expected, with wholesale prices flat in November, likely feeding into lower consumer price increases.
• Consumer spending remains resilient despite high inflation and interest rates, with stronger-than-expected retail sales in November.
• The job market is slowing but still adding a solid 200,000 jobs a month on average, with unemployment low at 3.7%.
• A mild recession is still possible if delayed impacts of high rates kick in, profits get squeezed further, and the Fed has to reverse course on rate cuts.