Posted 1/24/2024, 5:09:42 PM
Fed Policy Decisions Hinge on Latest GDP and Inflation Data Showing Solid but Cooling Growth
- Fourth-quarter GDP and latest PCE data will inform Fed policy decisions, especially regarding potential rate cuts
- Expectations are for 2.4% GDP growth in Q4 based on Atlanta Fed estimates, showing solid but decelerating growth
- PCE inflation expected to dip to 2.9% year-over-year in December from 3.2%, moving closer to Fed 2% target
- As inflation nears target, Fed will start considering goal of maximum employment and solid GDP growth
- Soft landing seen as most likely outcome if Fed can tread line of not keeping rates too high or cutting too quickly