December 18

12/18 - The Federal Reserve has finished raising interest rates. At last week’s Open Market Committee Meeting, the Fed held rates steady, and Chairman Jerome Powell said that he anticipated 3 rate cuts next year – most likely in the 2nd half of the year. Some private economists expect 5 cuts. That’s because inflation has mostly been tamed. The Consumer Price Index was up 3.1% from a year ago in November, still above the Fed’s 2% target, but down sharply from a high of 9.1% in June 2022. The Fed’s preferred inflation gauge, the PCE price index, was up just 3.0% in October. PCE core prices were up 3.5% from a year ago, but just 2.5% higher over the past six months. Mortgage rates (Freddie Mac survey) that peaked at 7.79% in late October, have declined to 6.95% over the past 8 weeks. That’s because yields on 10-year Treasury Bonds fell from 4.99% to 3.91% over the same period.