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  • Writer's pictureByron Gangnes

The Fed's Economy: A December Pre-Meeting Update

The Federal Open Market Committee begins its last meeting of the year tomorrow in Washington, DC. Here’s the economic picture they will be looking.

This is a summary. Please read the LinkedIn article for discussion and charts.

🔹 Labor market conditions have eased further, even if still somewhat tight by historical standards.

🔹 Current economic activity is slowing, although consumer spending remains too strong so far.

🔹 Indicators of future economic growth point toward more pronounced slowing.

🔹 Deflation progress is occurring, but core service inflation remains a problem.

The Fed is all but certain to hold rates steady at this week's meeting.

🔹 The ongoing easing of labor market conditions, progress in reducing year-over-year inflation, and evidence that inflation expectations remain well anchored should be enough to keep the FOMC members on the sidelines.

🔹 Further lagged effects and pending real interest rate rises should eliminate the need for further hikes. 

🔹 Still, the Fed is not poised to begin cutting rates soon. They will wait to see further decline in core service inflation.

Read the artice in LinkedIn:

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