RSS Fed Expected to Cut Rates in December and January: RBC Analysis

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 RSS Fed Expected to Cut Rates in December and January: RBC Analysis

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RBC preview the December 17-18 Federal Reserve Federal Open Market Committee (FOMC) meeting, expecting a 25bp rate cut at this meeting and then again at the January 31-February 1 2025, meeting

  • pace of easing has already slowed
  • recent communications from Fed speakers continue to hint at further but smaller rate cuts

After the February rate cut RBC expect the Fed to pause and reassess.

RBC point to developments in the economy, saying that November's jobs report was largely as expected

  • a gentle slowing more consistent with normalization than cyclical weakness

As for the upcoming inflation report this week (preview here:

Bank of America on the upcoming US CPI report - rally vs. volatility) :

  • Absent a big upside surprise that could raise the likelihood that the Fed chooses to pause rate cuts, we think the data's still soft enough to argue for a 25-bps cut from in December
This article was written by Eamonn Sheridan at www.forexlive.com.
 
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