Sign in
Rate cuts are coming, but it might not be this month: The US Federal Reserve is expected to continue cutting interest rates in 2025 despite no firm expectations about the next cut taking place this month, Bloomberg reports, citing three unnamed Fed officials. The final decision will be made at a meeting on 17-18 December.
It all depends on the data: There is support for a cut in December, but the decision will depend on whether upcoming data — including for the labor market — alters the “forecast for the path of inflation,” Fed Governor Christopher Waller said. New York and Atlanta Fed presidents shared this view, emphasizing that the inflation data will be the deciding factor as “the outlook remains highly uncertain.”
Service-sector inflation remains a concern: The personal consumption expenditures price index, excluding food and energy, increased by 2.8% for the 12 months ending in October, leading some investors to expect delays in the cutting cycle.
REFRESHER- Analysts have been anticipating interest rate cuts since the US elections wrapped last month, though the Fed has signaled that its rate cut cycle may play out slower than initially forecasted. Analysts also expect new policies from president-elect Donald Trump to drive up inflation and potentially slow down the monetary easing cycle further. The expected cuts would come just two months after the Fed’s 50 bps rate cut in September — its first in over four years.
A change to the Fed’s inflation policy is needed, officials say: Flexible average inflation policy will be reviewed in the Fed’s next framework evaluation in January. This review will look into the current framework, which allows inflation to run slightly above the target, and which Waller said was backward looking and designed before inflation began to rise.
MARKETS THIS MORNING-
Asian markets are in the red as investors digest the events in South Korea, with the country’s Kospi index down more than 2%, and South Korean stocks in the US seeing intense volatility. Over on Wall Street, futures are flat after the S&P 500 and Nasdaq closed at record highs.
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ADX |
9,235 |
-0.3% (YTD: -3.6%) |
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DFM |
4,847 |
+0.5% (YTD: +19.4%) |
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Nasdaq Dubai UAE20 |
3,886 |
-0.5% (YTD: +1.1%) |
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USD : AED CBUAE |
Buy 3.67 |
Sell 3.67 |
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EIBOR |
4.5% o/n |
4.4% 1 yr |
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TASI |
11,816 |
+0.7% (YTD: -1.0%) |
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EGX30 |
30,629 |
+0.3% (YTD: +23.0%) |
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S&P 500 |
6,050 |
+0.1% (YTD: +26.8%) |
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FTSE 100 |
8,359 |
+0.6% (YTD: +8.1%) |
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Euro Stoxx 50 |
4,879 |
+0.7% (YTD: +7.9%) |
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Brent crude |
USD 73.62 |
+2.5% |
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Natural gas (Nymex) |
USD 3.05 |
+0.2% |
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Gold |
USD 2,666.20 |
+0.3% |
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BTC |
USD 95,740.50 |
+0.3% (YTD: +127.0%) |
THE CLOSING BELL-
The ADX fell 0.3% yesterday on turnover of AED 1.4 bn. The index is down 3.6% YTD.
In the green: Fujairah Cement Industries (+4.4%), Abu Dhabi National Co. for Building Materials (+3.4%) and Abu Dhabi Ship Building Co. (+2.9%).
In the red: Abu Dhabi National Takaful Co (-7.7%), Julphar (-2.3%) and Apex Investments (-2.1%).
Over on the DFM, the index closed up 0.5% on turnover of AED 806.3 mn. Meanwhile Nasdaq Dubai fell 0.5%.
