The Fed’s preferred inflation measure - which takes price growth over personal consumption spending - has gone from an annual increase of 2.7% in October to 2.8% in November.
This is not the direction that the US monetary authorities want, and it raises doubts about their ability to control price growth.
Despite this figure, a further US key interest rate cut of 0.25% is still planned for 18 December. However, the uncertainty about the policies to be adopted by Donald Trump should lead the Fed to adopt a more expectant position beyond.
Tax cuts are expected to boost demand, while the fight against immigration and tariffs on foreign goods will constrain supply and push up prices.
Faced with such a scenario, it is very clever to predict the next steps of Jerome Powell and his colleagues at the Federal Reserve. Nevertheless, there is every reason to believe the US economy will remain dynamic in 2025.
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