Bloomberg Daybreak: Asia Edition Daybreak Holiday: Inflation Pressure, Markets, Retail
Dec 24, 2024
Joined by Tom Porcelli, Chief U.S. Economist at PGIM Fixed Income, who shares insights on inflation and the Fed's future strategies. Lori Calvasina from RBC Capital Markets discusses equity market dynamics, particularly growth vs. value stocks. Cameron Dawson from NewEdge Wealth predicts market volatility and examines the challenges facing small and mid-cap companies. Retail trends are analyzed, revealing shifts in consumer behavior and the importance of experiential retail as they navigate the complexities of the 2024 holiday season.
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Inflation Progress and Wage Slowdown
- Inflation has seen progress, dropping from nearly 6% to 2.8% (core PCE).
- Wages are slowing down, indicated by decreasing quit rates, hiring rates, and labor confidence.
Fed's Data Dependency and Rate Cut Flexibility
- The Fed likely prefers optionality to adjust to evolving data, suggesting possible faster or slower rate cuts than projected.
- Focusing on individual data points rather than trends can be problematic due to increased data volatility.
Fed's Dual Mandate and Labor Market Concerns
- The Fed should consider both inflation and labor market conditions, as it's a dual mandate central bank.
- While shifting focus is sometimes necessary, be cautious as labor market cracks are forming.