It's Thursday ¯\_(ツ)_/¯

The lede here has to be that the Federal Reserve did not lower interest rates yesterday for the first time in about 5 months. (Unsurprisingly, Donald Trump has completely lost his shit over this.)

The Federal Reserve hit the pause button on recent interest rate cuts, entering a new wait-and-see phase as it tries to determine whether and how much more to lower rates from a recent two-decade high.

The decision on Wednesday to leave the benchmark federal-funds rate at its current range around 4.3% followed three consecutive rate cuts beginning in September, when the rate stood around 5.3%.

Officials made only minor changes to the policy statement they released at the conclusion of their two-day meeting. The statement indicated comfort with their interest-rate stance for an economy where inflation remains somewhat above their goal and where labor market conditions have been solid.

………

A widely watched gauge of so-called core inflation, which excludes volatile food and energy prices, rose 2.8% in November from a year earlier and is likely to sit at the same level for the 12 months ended December. 

Because inflation was unusually strong during the first quarter of 2024, mild readings of inflation over the coming months could lead 12-month measures to drop significantly as the high readings of one year ago are replaced with lower ones. For example, if core prices in January, February and March rise at a 0.19% month-over-month rate (their monthly average since April), then year-over-year inflation would slow to 2.3% in March.

That last bit is math 101. 

My guess is that one of the big reasons for the pause is because the Federal Reserve has no fucking where the Trump administration is going on the budget and the economy.

In more general economic terms, and likely one reason that the Fed forbore rate cuts is because, 4th quarter GDP was quite strong, with the economy growing at a 2.3% annual rate, largely because of large increases in consumer spending.

This is down from the 3rd quarter's 3.1% rate, and it's lower than the forecast of 2.6%, but it is still fairly strong.

Further reinforcing this is the fact that today's unemployment report was pretty strong, with initial claims falling by 16,000 to 207,000, and continuing claims falling by  39, 000 to 1.89 million.

I think that everyone is waiting to see how fucking insane Trump's economic and fiscal plans are.