Only Fed Rate-Setter Who Opposed Last Week's Cut Speaks Out; Xi Digs In With Top-Down Economic Plan By Vicky Ge Huang
The coming two weeks are expected to be very quiet due to Christmas and New Year holidays, but investors will take stock of an eventful year in which Republican Donald Trump was elected U.S. president and chaotic politics emerged in various European countries and in Canada.
A smattering of economic data are due in the U.S., Japan and Europe . These will be watched as investors continue to gauge the next moves in interest rates and assess how divergent countries' interest-rate policies are likely to be in 2025.
The Federal Reserve cut interest rates by 25 basis points in December, but said the pace of rate cuts was likely to slow next year. U.S. money markets currently price in a likelihood of just two quarter-point rate cuts in 2025, with a risk of just one.
Cleveland Fed President Beth Hammack was the only policymaker to dissent against the cut. To slow inflation back to the Fed's target pace, it's important to hold rates steady, especially because the current rate isn't far from a neutral setting that would no longer curb inflation, she said.
The best indicators on the current health of the U.S. economy will come from the Conference Board's December consumer confidence indicator on Monday, Dec. 23, and from the ISM survey on manufacturing activity in December due on Friday, Jan. 3.
Other data include durable goods and new home sales data for November on Tuesday Dec. 24, and weekly jobless claims figures on Thursday Dec. 26 and Thursday Jan. 2.
Top News Only Fed Rate-Setter Who Didn't Want a Cut Last Week Speaks Out
Comments Friday showed some of the debate inside the Federal Reserve as the central bank tries to determine the path ahead for interest rates.
On Wednesday, the Fed cut its benchmark rate for a third straight meeting, down to a range of 4.25% to 4.5%. Officials curtailed projections for further cuts next year, and signaled inflation could remain elevated in 2025.
Xi Digs In With Top-Down Plan Even as China Drowns in Debt
As China squares off with the U.S. for a second showdown over trade, Xi Jinping is digging in. He's convinced that his top-down approach to managing China's economy, with plans to make it an even bigger industrial power, offers the best path for China to eventually surpass the U.S. in economic might.
U.S. Economy Fed's Favored Inflation Gauge Brings Some Good News
The Federal Reserve's preferred inflation measure showed prices rose less than expected in November, a welcome sign of progress as the central bank tries to get inflation back to the 2% target.
Consumer Confidence Climbs Driven by Republican Sentiment
The University of Michigan's index of consumer sentiment for the end of December surged to 74.0 from 71.8 in November, matching the mid-month reading of 74.0 and economists' expectations.
Wall Street Landlords Loved These Suburbs. Rent Control Ended That.
Wall Street's landlords have long embraced two Maryland counties next to Washington, D.C. Multifamily buildings in these suburbs cater to a steady stream of federal employees, making their rental properties some of the most attractive in the U.S. to institutional investors.
Coke, PepsiCo Lobby to Keep Sugary Sodas in Food-Stamp Program
Robert F. Kennedy Jr., the president-elect's nominee to run the Health and Human Services Department, aims to remove soda and processed foods from federal programs such as the Supplemental Nutrition Assistance Program, also known as food stamps. The move could have big repercussions for the beverage industry .
Financial Regulation What Switzerland Should Have Done to Save Credit Suisse
Switzerland might have averted the collapse of Credit Suisse , its second largest bank, if the country's financial regulator took a harder line overseeing it and enforcing capital rules, a parliamentary report found Friday. One of the key recommendations: possibly more capital at the country's remaining big bank, UBS.
Majority of Crypto Hedge Funds Report Facing Banking Issues
Out of 160 crypto hedge funds, three-quarters reported issues with basic banking services over the past three years, according to a new survey. The funds invest in digital currencies and blockchain-technology companies.
Research Budget Standoff In Washington Marks Preview of DOGE Constraints
The budget standoff in Washington is a preview of the constraints that the DOGE spending-cut effort will face under the Trump administration, analysts at Strategas write. DOGE's leaders Elon Musk and Vivek Ramaswamy can suggest ways to trim the size of the federal government but will need to corral skeptical legislators to their side in order to make any actual progress. That's reflected by the challenge that Trump's allies have faced getting the Republican-controlled house to pass Trump's preferred version of a temporary budget and debt-ceiling legislation as the year wraps up. "The limits of DOGE are apparent here as Congress needs to vote on spending changes," Strategas writes. - Matt Grossman
Basis Points Cabinets made in China were rerouted through Malaysia and ended up in U.S. kitchens- sparking a Customs probe and splintering an American industry. Wall Street's lucrative engine for initial public offerings picked up in 2024 but still lagged behind historical standards, according to a year-end look at the market by Renaissance Capital. (Barron's) It's common to make resolutions around the start of a new year, but keeping those promises is another story . Setting realistic goals about your money, and sticking to a plan, can pay off throughout the year and beyond. The U.K. economy stagnated in the previous quarter in a blow to the government's hopes for growth. Gross domestic product flatlined between July and September, according to data set out Monday by the Office for National Statistics. Bitcoin price was wavering early Monday after a bad week for the crypto. It comes after President-elect Donald Trump said he would nominate Stephen Miran to be Chair of his Council of Economic Advisers, which will likely please the crypto industry. (Barron's) Cocoa looks to be the biggest gainer among major commodities this year, even outpacing the rise in the U.S. stock market and bitcoin, with prices more than doubling to reach a fresh record high this month. (MarketWatch) About Us
WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to [[email protected]].
This article is a text version of a Wall Street Journal newsletter published earlier today.