Last week…
The Federal Open Market Committee (FOMC) reduced interest rates by 25 basis points, as expected, to a new range of 3.50% to 3.75%. In what was the final meeting of the year, the FOMC voted 9-3 in favor of a third consecutive rate cut. Of the three dissenting votes, two members wanted to hold rates steady while one member supported a 50-basis point cut. After the decision, Federal Reserve Chairman Jerome Powell said, “We haven’t made any decision about January, but as I said, we think we’re well positioned to wait and see how the economy performs.” According to the Fed dot plot, the forecast remains unchanged for just one quarter-point reduction in 2026.
Elsewhere on the Fed front, President Donald Trump has begun the interview process for the Federal Reserve Chairman position that is set to be vacated in May 2026. Trump did not say who he wanted to fill the role but earlier in the week said, “I have a pretty good idea of who I want.” According to the Wall Street Journal, former Fed Governor Kevin Warsh could be the new frontrunner to take over for Jerome Powell. Trump acknowledged in an interview that Warsh was at the top of the list. Also in the running, and previously viewed as the frontrunner, is National Economic Council Director Kevin Hassett.
Nvidia (NVDA) has been granted approval from the United States government to sell its H200 artificial intelligence chips to “approved customers” in China. The condition is that the United States will receive a 25% cut of sales.
This week…
On Tuesday, the unemployment rate is expected to be 4.4%, nonfarm payrolls are forecasted to be 35,000, and average hourly earnings month-over-month are expected to be 0.2%.
On Thursday, the inflation rate year-over-year for November is expected to be 3.2%. Meanwhile, the core inflation rate year-over-year for November is expected to be 3.2%.
On Friday, existing home sales for November are expected to be 3.90 million. The previous reading was the highest level in eight months.
The GDP growth rate reading has been delayed to December 23 due to the prior government shutdown.
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- The Rockline Team
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