On December 18, 2024, Federal Reserve Chairman Powell held a press conference after the Federal Open Market Committee meeting in Washington, DC.
Al Drago | Bloomberg | Getty Images
This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Fed cautious on inflation, Trump policies
At the December meeting, the U.S. Fed officials have expressed concern that inflation will remain stubbornly above the central bank’s 2% target and the possible impact of U.S. President-elect Donald Trump’s policies. Therefore, officials will The pace of interest rate cuts slowsMinutes of the meeting released Wednesday showed.
U.S. stocks shake off inflation worries
U.S. stocks struggle Small gains on Wednesday although 10-Year Treasury Bond Yield touch it highest since April After the minutes of the Federal Reserve meeting are released. Asia Pacific market Most trading lower on Thursday. Australian S&P/ASX 200 Index Data showed the country closed down 0.24% retail sales November’s gain was less than expected.
Asian central banks face dollar strength
Asian currencies such as the Chinese yuan, Japanese yen and South Korean won have fallen against the dollar since Trump won the presidential election in November. This constitutes a Difficulties facing Asia’s central banks: Currency depreciation will boost exports but may increase imported inflation, complicating banks’ ability to guide domestic economic policy.
Concerns about deflation in China
China’s consumer prices rose 0.1% in December compared with the same period last year data Data released by the National Bureau of Statistics on Thursday showed. On a monthly basis, China’s CPI remained flat, falling 0.6% in November. China’s continued decline in consumer inflation shows that China is struggling to cope with weak domestic demand. Stirring deflation fears.
Microsoft lays off employees based on performance
Microsoft yes Cut a small number of jobs The company confirmed to CNBC on Wednesday that the changes across divisions are performance-based. business insider First reported on the company’s plans. A person familiar with the matter who asked not to be named said the layoffs will affect less than 1% of employees.
(PRO) Bernstein said, please pay attention to this Taiwanese chip supplier
At the International Consumer Electronics Show, NVIDIA Announced a desktop supercomputer aimed at artificial intelligence researchers and data scientists. The computer will feature Nvidia’s Grace Blackwell Superchip, which will be produced by Nvidia in partnership with a company. Taiwan chip supplier. Bernstein said that starting in 2026, suppliers will gain huge economic benefits from this cooperation.
bottom line
On paper, the minutes from the Fed’s December meeting are bad news for investors. Officials worry about inflation and the impact of Trump’s stated policies (although Trump doesn’t explicitly name them).
“Nearly all participants agreed that upside risks to the inflation outlook have increased,” the minutes said. “Participants cited recent stronger-than-expected inflation data and the possible impact of potential changes in trade and immigration policy.”
As a result, Fed officials expect the pace of interest rate cuts to slow down in the future.
Upward inflation risks, problems with economic policy, and lower-than-expected interest rate cuts: this is a strong but bitter drink for investors. In intraday trading, the 10-year Treasury yield hit 4.730%, the highest level since April.
However, stocks mostly ignored the warning on Wednesday and continued to rise. this S&P 500 Index 0.16% was added, and Dow Jones Industrial Average up 0.25%. this Nasdaq Index Down 0.06% – Technology stocks such as Palantir, AMD and micro strategy Had a rough day – but still closer to flatline rather than a steep decline.
Investors appear to have priced in Fed’s inflation warning Recent clicksThe plan, which foresees just two-quarter percentage points of interest rate cuts in 2025, shocked markets when it was released in December.
Federal Reserve Governor Christopher Waller also offered some comfort to investors. When he gave a speech in Paris explain The recent stubbornness of inflation has been driven largely by “imputed” prices for things like housing services, while “observed” prices for other goods and services point to deflation.
Waller added that if economic conditions develop in his view, he would “support continued lowering of policy rates in 2025.”
Friday’s U.S. jobs report for December was not reflected in prices. This could be the next catalyst for the market.
—CNBC’s Jeff Cox, Sean Conlon and Pia Singh contributed to this report.
