📆 Thursday, December 14
► Yesterday, the Federal Reserve kept its key interest rate steady for the third consecutive time and increased their expected interest rate cut expectations for 2024 to 70 bps of cuts (up from 40 bps projected in the last dot plot update). The FOMC dot plot shows a significantly more aggressive easing than previously indicated, with market expectations even higher. This decision, amidst signs easing inflation and still stable economic conditions, has led to a positive response in the markets, with expectations of a reduction in the federal funds rate to 2%-2.25% by 2026.
► European stocks climb. The Euro Stoxx 600's is trading 1.5% higher. Focus shifts to Bank of England (12:00 UTC+0) and European Central Bank (13:15 UTC+0) meetings, for their respective interest rate decisions. Our Chief Analyst expect both central banks to open the path for rate cuts in H1/2024 with in particular the ECB risking a deflation if not acting soon.
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