TechFlow news — On December 13, according to Jinshi News, Stephen Juneau, Chief Economist at Bank of America, issued a new report warning that investors who ignore inflation data may face a reckoning in 2025. The latest figures show the November CPI rose 2.7% year-on-year and 0.3% month-on-month, up 0.1 percentage points from October; November PPI increased 0.4% month-on-month, significantly exceeding the market expectation of 0.2%.
Federal funds futures indicate a 98% probability of the Fed cutting rates by 25 basis points next week. However, Rick Rieder, CIO of BlackRock Global Fixed Income, Greg Daco, Chief Economist at EY, and Oren Klachkin, Economist at Nationwide, all expect the Federal Reserve could pause its rate-cutting cycle in early 2025 due to potential new policies under a Trump administration.
The market should remain alert to three key risks: higher tariffs, deficit-financed tax cuts, and tighter immigration policies—these factors could keep core PCE inflation elevated over the next two years. Daco specifically noted that while the likelihood of a rate cut next week is close to a "coin toss," the pace of subsequent cuts will likely slow markedly, as policymakers remain highly vigilant toward the incoming administration's policy agenda.
