Bloomberg Daybreak: US Edition Daybreak Holiday: Inflation Pressure, Markets, Retail
Dec 25, 2024
Tom Porcelli, Chief U.S. Economist at PGIM Fixed Income, shares insights on the Fed's potential actions in 2025, highlighting inflation challenges and labor market dynamics. Lori Calvasina, Head of U.S. Equity Strategy at RBC Capital Markets, and Cameron Dawson, Chief Investment Officer at NewEdge Wealth, delve into stock market predictions and investment strategies for 2025. They also discuss retailers' adaptation to changing consumer behaviors during the holiday season, emphasizing modest growth amid inflation pressures.
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Inflation Progress
- Inflation has fallen from 6% to 2.8% (core PCE), showing progress.
- Stripping out shelter, both headline and core inflation are tame (1.6% and 2.1% respectively for CPI).
Fed's Focus
- The Fed wants flexibility to adjust to changing conditions.
- Focusing on individual volatile data points is problematic.
Labor Market Cracks
- The Fed is shifting focus back to inflation, but cracks are forming in the labor market.
- Quit rates, hiring rates, and labor confidence are all declining, impacting unemployment.