Would the Fed’s November PCE dot plot have looked different?

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The government shutdown in the US has been suspended
The US government narrowly avoided a shutdown after President Joe Biden signed on Saturday an emergency solution law for state funding. President-elect Donald Trump and Elon Musk on Wednesday thwarted an initial negotiated financing plan by sharply criticizing its provisions, notably insisting on a two-year suspension of the U.S. debt limit.

Slight cooling with price increases
US headline inflation in November rose only 0.1% compared to Octoberaccording to the price index of personal consumption expenditure. On an annual basis, prices rose by 2.4%. Both values ​​were 10 basis points lower than expected. Core inflation was also 10 basis points below forecast. The PCE is the Federal Reserve’s preferred inflation indicator.

The markets in the USA recovered
On Friday, the S&P 500 rose by 1.09%, the Dow Jones Industrial Average added 1.18% and the Nasdaq Composite rose 1.03%. But all indices fell on the week. The pan-European Stoxx 600 fell by 0.88% End of the week down 1.9%. Novo Nordisk Shares plunged 17.8% after the Danish pharmaceutical company reported disappointing test results for a new weight loss drug.

CEOs see the door
Blue chip companies such as Boeing, Intel And Starbucksannounced changes to their board of directors this year. You are not alone. There was 327 CEO departures in publicly traded U.S. companies this year through November, according to outplacement firm Challenger, Gray & Christmas. This is the highest value since the company began collecting data in 2010.

(PRO) Will Rudolph’s red nose outshine Santa Claus?
After a few turbulent weeks of trading, stocks are likely to end December in the red. But that Santa Claus rallywhich traditionally takes place on the last five trading days of the year and the first two of the following year, could reignite the seasonal mood. In data going back to 1969, the S&P has gained an average of 1.3%, according to the Stock Trader’s Almanac.

Shares sold out on Wednesday after the Fed indicated it was looking at it two interest rate cuts by a quarter point in the coming year less than the four previously forecast. “We have moved sideways in 12-month inflation,” said Fed Chairman Jerome Powell at his press conference.

But the November PCE came in cooler than expected. “Stubborn inflation seemed a little less stuck this morning,” said Chris Larkin, managing director of trading and investing at E-Trade Morgan Stanley.

The Fed has emphasized again And again that it is “data dependent”. Would the Fed have presented the world with a slightly different dot chart if it had had the opportunity to review the PCE data first?

Chicago Fed President Austan Goolsbee gave some credence to that line of thinking, telling CNBC’s Steve Liesman that he was confident that November’s inflation numbers “indicate that the few months of firming were more of a bump than a change in direction,” with others Words: The economy is “still on track to reach 2%,” Goolsbee said.

On the other hand, Powell said in July that the central bank would be “data dependent, but not data point dependent” when deciding when to cut interest rates. Even if November’s PCE index had signaled a return of inflation to its downward trend, one month’s worth of data would not have moved the points. Maybe two consecutive months of cool reading would have made some difference?

These questions are rhetorical in nature. Conditional questions are unanswerable, especially in markets. But in their vagueness and awkwardness, they make it clear that trying to time or outsmart the market, especially in volatile times like these, may not be the best idea.

Instead, delve deeply into the fundamentals — earnings, cash flow, future income — that influence stocks, even as inflation and interest rates rise and fall. Remember the days when inflation reports and Fed meetings were just another day in the markets? (Not a rhetorical question.)

— CNBC’s Jesse Pound, Brian Evans and Sean Conlon contributed to this report.