NAB Morning Call
Powell the Grinch?
Nov 17, 2024
Taylor Nugent, NAB’s market strategist, shares insights on Jerome Powell's recent comments regarding Federal Reserve rate cuts. He discusses the mixed US data, highlighting strong retail sales and unexpected manufacturing growth. There’s a focus on market reactions and the global implications of these developments. Nugent also touches on the week ahead, suggesting it will be filled with central bank commentary rather than concrete data. This analysis paints a picture of a complex economic landscape where uncertainty looms.
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Quick takeaways
- Jerome Powell's remarks indicate a cautious Federal Reserve stance on interest rates, reducing the likelihood of a December cut to nearly 50%.
- Mixed economic data reveals resilience in retail sales while challenging manufacturing conditions create uncertainty about the overall U.S. economic momentum.
Deep dives
Federal Reserve's Rate Cut Uncertainty
The likelihood of a Federal Reserve rate cut in December has diminished following remarks made by Jerome Powell. He indicated that the economy is not showing urgency for a rate decrease, sparking skepticism among market participants. This shift in sentiment has resulted in pricing for a December cut dropping to around 50%, as opposed to earlier expectations. Powell's commentary highlights the Fed's cautious approach, suggesting they may not proceed with rate changes on a regular basis as they assess incoming economic data over the next few months.
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