Making Sense: In Brief
The week ahead for markets and the economy
Monday, January 27, 2025
Phil: Last week, markets digested post-inauguration executive orders for the Trump administration along with corporate earnings results.
The week ahead is a busy one, headlined by Wednesday's FOMC interest rate decision. We and markets are expecting no change in the federal funds rate as risks between inflation and the labor market have become more balanced in recent months. Investors will instead be focused on the meeting statement and Chair Powell's press conference for any indication on the path of rates going forward.
Market headlines will also be dominated by earnings results from dozens of S&P 500 companies this week, including members of the Magnificent Seven. Investors will be watching not only financial results, but also for guidance relative to capital spending and customer demand.
In economic data, fourth quarter GDP is released on Thursday morning. After growing 3.1% in the third quarter, fourth quarter growth is forecasted to remain robust around 2.6%. The US economy continues to hum along.
On Friday, December's personal income and spending report is released and is expected to show continued gains in both consumption and earnings. This report also contains an important inflation measure, the PCE deflator. Economists expect the core measure, which excludes the impact of food and energy, to post a 2.8% year-over-year gain—still well above the Fed's 2% target.
So items to watch this week. One, the FOMC rate decision. Two, corporate earnings. Three, fourth quarter GDP. And four, the personal income and spending report.
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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