inflation

Analysts: The Federal Reserve may pause the rate cut process in early 2025, ignoring inflation data could face liquidation risks

ChainCatcher news, according to Jinshi reports, U.S. Bank Chief Economist Stephen Juneau released a latest report warning that investors ignoring inflation data may face liquidation risks in 2025. The latest data shows that the November CPI rose by 2.7% year-on-year and increased by 0.3% month-on-month, up 0.1 percentage points from October; the November PPI rose by 0.4% month-on-month, significantly exceeding the market expectation of 0.2%.Federal funds futures indicate a 98% probability that the Federal Reserve will cut interest rates by 25 basis points next week, but BlackRock Global Fixed Income CIO Rick Rieder, EY Chief Economist Greg Daco, and Nationwide Economist Oren Klachkin all expect that, influenced by potential new policies from Trump, the Federal Reserve may pause the rate-cutting process in early 2025.The market needs to be wary of three major risks: higher tariff policies, deficit financing tax cut plans, and tightened immigration policies, as these factors may keep the core PCE inflation rate elevated over the next two years. Daco particularly pointed out that although the possibility of a rate cut next week is close to a "coin toss probability," the subsequent pace of rate cuts will clearly slow down, and policymakers will remain highly vigilant regarding new government policies.

4E: U.S. November PPI inflation exceeded expectations, all three major U.S. stock indices fell, and the DeFi sector of the cryptocurrency market strengthened

ChainCatcher news, the latest data shows that the U.S. November PPI rose more than expected, with a month-on-month increase reaching the largest in seven months, indicating rising inflation. The market expects a 25 basis point rate cut next week, but bets on a pause in rate cuts in January next year.According to 4E monitoring, the market has fully priced in the expectation of a rate cut in December, but the latest data has increased uncertainty about the Fed's rate cut prospects for next year. The three major U.S. stock indexes all fell, with the Dow Jones down 0.53% for six consecutive days, the S&P 500 down 0.54%, and the Nasdaq down 0.66%. Large tech stocks failed to maintain the momentum from earlier this week, with Nvidia down 1.41%, Tesla down 1.57%, and crypto-related stock MSTR down 4.67%, while Coinbase fell 0.27%.The crypto market surged and then retreated. When Trump rang the opening bell at the NYSE, he stated that he would do great things in the cryptocurrency space, briefly pushing Bitcoin above $102,000. However, it later fell back below $100,000 due to the drag from U.S. stocks, causing a collective retreat in the crypto market. The DeFi sector showed strong performance, driven by the Trump family project WLFI purchasing ETH, AAVE, and LINK, leading to a broad rise in DeFi tokens. Currently, WLFI holds approximately $74.9 million worth of cryptocurrencies, with the largest holding being ETH, which the market views as the Trump family's optimistic outlook on Ethereum's potential and an early layout of their crypto strategy.In the forex and commodities sector, the inflation data boosted the dollar index by 0.31%, marking the fifth consecutive day of gains; the International Energy Agency (IEA) predicted a supply surplus next year, offsetting the optimistic sentiment around rate cuts and dragging down U.S. and Brent crude oil prices; the strengthening dollar put pressure on gold, and the strong PPI data further diminished gold's appeal as a safe haven, causing gold to plummet, with the London spot gold price falling by 1.33%.eeee.com is a financial trading platform that supports assets such as cryptocurrencies, stock indices, bulk gold, and forex. Recently, it launched a USDT stablecoin financial product with an annualized return of 5.5%, providing investors with potential hedging options. 4E reminds you to pay attention to market volatility risks and to allocate assets wisely.

Institution: Beware of the risk of inflation rising again in 2025, the Federal Reserve may be forced to slow down interest rate cuts or even restart rate hikes

ChainCatcher news, according to Jinshi reports, multiple Wall Street institutions warn that the risk of a rebound in U.S. inflation in 2025 is increasing. Goldman Sachs Chief Economist Jan Hatzius predicts that if Trump's tariff proposal is implemented, it could push the core PCE index, which the Federal Reserve focuses on, up by nearly 1%. Anders Persson, CIO of Nuveen Global Fixed Income, which manages $1.3 trillion in assets, stated that inflation rates may remain above the Federal Reserve's 2% target for the next 12 months and even for several years; in the worst-case scenario, the Federal Reserve may be forced to pivot 180 degrees and restart interest rate hikes, leading to more severe stagflation.The market expects that the CPI data for November, to be released this Wednesday, will continue to rise, with the core CPI annual rate possibly remaining above 2% until October next year. Derek Tang, an economist at Monetary Policy Analytics, pointed out that if the CPI data exceeds expectations and the previous values are revised upward, it could change policymakers' assessment of inflation and affect the pace of interest rate cuts in 2025. In the current situation, Nuveen recommends focusing on fixed income assets, expecting that U.S. Treasury yields will provide substantial returns over the next 12 months; if the economy falls into stagflation, cash may become the best-performing asset class.

Deutsche Bank: The Federal Reserve may delay interest rate cuts due to Trump's tariff policy, and inflationary pressures cannot be ignored

ChainCatcher news, according to Jinshi reports, Trump has promised to implement comprehensive tariffs on imported goods upon returning to the White House. During his first term, Federal Reserve staff simulated a similar scenario and concluded that inflation would accelerate but would not last long. Ultimately, they determined that tariffs were a drag on the economy and recommended lowering interest rates as the best remedy.However, there are two main obstacles to taking this approach now. First, the Federal Reserve has not fully overcome the post-pandemic price increase issue. Second, the Federal Reserve has faced severe criticism for describing that price increase as "transitory." Therefore, Powell and his colleagues are least willing to downplay the price surge, believing it will not be persistent.Justin Weder, an economist at Deutsche Bank in the U.S., stated, "Even a price increase viewed as transitory could prompt the Federal Reserve to raise interest rates, or at least keep them on the sidelines, preventing them from cutting rates significantly as they originally hoped. They must acknowledge the actual inflation rate. Perhaps they can avoid terms like 'transitory' or 'temporary' and instead say something like 'inflation is rising due to tariff effects,' clearly indicating that this is a result of tariffs and not necessarily demand-driven."
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