A Fed Induced Market Pullback

The Macro Institute's Weekly Economic Primer

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The Macro Institute
December 23, 2024

This is not a busy data week given the holiday. Still, there are some interesting leading indicators coming out like the Philly Services PMI on Tuesday and the Richmond Fed Index on Thursday. Aside from that, the focus will likely remain on the Fed and its renewed focus on inflation. We expect inflation to surprise to the upside next year after being in the disinflation camp for two years. If this ends up being correct, then there is probably a lot of upside to bond yields and the Fed's three expected rate cuts in 2025 might just turn into rate hikes. It will be interesting to see what the inflation proxies of the December PMIs reveal. Happy Holidays to all of you.

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