- The Federal Reserve held the federal-funds target rate range at 5.25%-5.50%
- The Consumer Price Index rose 3.1% in November compared to prior year
- Retail sales rose 0.3% in November
Please join us for our 4th Quarter Gallagher Financial Markets Update webinar on Thur, Jan 11th at 11:00 a.m. ET.
Top Three Market Headlines
Federal Reserve Remains on Hold: The Federal Reserve's policy-setting committee voted last week to maintain the federal-funds interest rate target range at 5.25% to 5.50%. This was the third straight meeting at which the Fed held the target steady after having raised it to this level in July. Concurrently, the central bank released committee members' updated projections for the future path of rates — the so-called "dot plot." According to this, policymakers now anticipate no further rate hikes and see the fed-funds rate target range declining by three-quarters of a percentage point to 4.50% to 4.75% during 2024, a faster pace than previously projected in September.
Lower Gas Prices Dampen Inflation Rate: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) increased in November by 0.1% and 3.1% over the prior month and year, respectively. A key factor weighing on the index was a decline in gasoline prices, which helped offset higher costs for housing and insurance. The "core" CPI, which excludes the volatile food and energy categories, increased by 0.3% on the month and 4.0% versus the prior year. The latter figure, equal to October's pace, has fallen from a level of 6.6% in September 2022, but remains above the Federal Reserve's stated 2% target.
Retail Sales Rebound in November: Sales at U.S. retail and food service establishments rebounded in November, rising 0.3% on the month after having fallen by 0.2% in October. Solid consumer spending was reported for restaurants, furniture stores, and internet retailers. The overall sales rate was depressed by decreased sales at gasoline stations due to lower gas prices; excluding gasoline stations, in fact, sales growth across all other types of establishments was 0.6%.
Please note: There will be no Weekly Financial Market Update published next Monday, December 25. The next report will be published on January 2, 2024. We would like to wish everyone a happy holiday season!