Making Sense: In Brief
The week ahead for markets and the economy
Monday, November 18, 2024
Blake: Last week, financial markets continued to react to the 2024 election as investors attempt to position for economic policy changes around taxes, international trade and a host of other factors.
CPI inflation came in above the Fed's 2% target. And in a speech, Federal Reserve Chair Powell pointed to the economy's underlying strength and pledged to approach future rate decisions carefully, leading rates investors to consider more seriously that the Fed may pause its rate-cutting campaign sometime soon.
Turning to the week ahead, a slow news week on the economic data front will leave plenty of space for markets to continue reacting to the evolving economic policy outlook for next year. Markets will be watching for any early signals on how the incoming government is considering new tariffs on imported goods and its policy priorities for tax legislation, which is something that must be addressed sometime in 2025.
A handful of Federal Reserve policymakers will also give speeches this week, offering some insight into their outlooks for the economy and the likely path of interest rates. The next Fed meeting is on December 18, so there's a lot of room for new data and information to influence market expectations, which currently view a 25-basis-point cut at the December meeting as more of a toss-up than a done deal.
Lastly, we'll see a slew of housing data released this week, including housing starts, mortgage applications and existing home sales. This will be an important chance to see how rising mortgage rates—now at 6.8% compared to 6.4% a month ago and 6.2% in September—are affecting housing sales and demand.
So things to watch this week. One, incoming information about the economic policy outlook following the recent elections. Two, Federal Reserve policymakers' speeches, which will influence the outlook for interest rate cuts. And three, housing market data throughout the week.
Authors
Brent Ciliano CFA | SVP, Chief Investment Officer
Capital Management Group | First Citizens Bank
8510 Colonnade Center Drive | Raleigh, NC 27615
Brent.Ciliano@FirstCitizens.com | 919-716-2650
Phillip Neuhart | SVP, Director of Market & Economic Research
Capital Management Group | First Citizens Bank
8510 Colonnade Center Drive | Raleigh, NC 27615
Phillip.Neuhart@FirstCitizens.com | 919-716-2403
Blake Taylor | VP, Market & Economic Research Analyst
Capital Management Group | First Citizens Bank
8510 Colonnade Center Drive | Raleigh, NC 27615
Blake.Taylor@FirstCitizens.com | 919-716-7964
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