Fed Pause News Today

A broad stock market rally was the hallmark of last week’s trading action. The Federal Reserve signaled a pause on interest rate hikes and three possible rate…

The Federal Reserve decided to forgo an interest rate hike amid reports showing inflation is cooling and signaled that it will cut rates faster than previously anticipated next year.

With the Fed pausing hike in interest rates in November and US inflation slowing down from 3.7% to 3.2% and core CPI falling to 4%; the US 10-year interest rates fell almost 50 bps to 4.4% and Barclays Agg. Bond Index moved up 4%. This led to Euphoria in the Global Equity markets; NASDAQ moving up 9%, MSCI EM up 6% and MSCI World up 7%, outperforming MSCI India which was up only 2%.

Spot gold was steady at $1,980.20 per ounce by 2:45pm ET (1945 GMT) after rising to a two-week high earlier in the session. Prices were up about 2.2 percent so far this week.

New reports indicate that inflation meaningfully declined last month, a development that investors are interpreting to mean that the Federal Reserve is likely done with raising interest rates and may start cutting them before long.

Wholesale prices fell half a percentage point in October, the Bureau of Economic Analysis reported Wednesday in an update to the producer price index, thanks in large part to cratering gas prices in the month.

Federal Reserve Chairman Jerome Powell indicated the Fed would keep interest rates steady at its next meeting but left the door open to hikes in following months if needed to curb inflation.

Bond Yields Argue for Fed Pause; Bostic Says Economy Slowing, Fed Policy in Right Place By James Christie Good day. Federal Reserve officials are signaling a run-up in long-term interest rates...

The updated projections see the Fed funds target rate edging down to 5.1% by the end of next year, and to 3.9% by the end of 2025. Since the Fed began tightening in March, core inflation has cooled. But its slow descent toward the central banks 2% target has been slow and uneven. The SEP forecasts inflation to drop to 3.3% by year-end, and to approach the central banks average annual 2% target.

This recession indicator has successfully called the last eight recessions and it's wrong to assume this time is different, Campbell Harvey said.