U.S. Inflation Data, Rate Decisions in Eurozone and Australia in Focus

U.S. Inflation Data, Rate Decisions in Eurozone and Australia in Focus By Vicky Ge Huang

U.S. inflation data are likely to be the highlight of the week as the outlook for interest rates in America remains uncertain.

A rate cut at next week's Federal Reserve meeting is broadly expected but far from being a done deal. A strong inflation reading could make it more likely that rates are left on hold, so the data have potential to cause volatile moves in the dollar and U.S. Treasurys.

Signals from inflation, employment and GDP all show that the economy has held up better than the central bank was expecting in September, president of the Cleveland Fed said. She said she thinks it might be necessary to cut rates only once more over the course of the Fed's next two meetings.

Meanwhile, in Asia, a decision by Australia's central bank, plus key data from Japan and China are the main items in focus.

China's top decision-making body-the country's 24-member Politburo-pledged Monday in a meeting to implement more proactive fiscal policy and vowed to boost domestic demand and stabilize housing and property markets, according to an official readout.

China's consumer price growth slowed in November, while factory-gate prices improved but stayed in decline, suggesting persistent weak domestic demand despite Beijing's push to revive spending.

And in Europe, a rate cut is expected by the European Central Bank and by the Swiss National Bank.

Also in focus this week are interest-rate decisions in Canada and Brazil. Read more .

Top News Fed Official Says the Time for a Pause in Rate Cuts Seems Near

For many investors, Friday's jobs report confirmed expectations that the Federal Reserve is on track to cut interest rates again this month. But one Fed official with a vote on the central bank's policy committee sounded cautious Friday about moving ahead too quickly with rate cuts.

Beth Hammack, the president of the Cleveland Fed, said that monetary policy looks to her to be only "somewhat restrictive" right now. If she is right, that could mean that after additional rate cuts, the Fed's policy stance would no longer be doing very much to help get inflation back to the Fed's 2% target. Read more .

Trump Says He Has No Plan to Remove Powell at Fed

During an interview on NBC's Meet the Press, President-elect Donald Trump fielded a question about whether he planned to replace Powell, who has said he would not leave the job even if asked to do so. "No, I don't think so. I don't see it," Trump answered. (Barron's)

China Signals More Forceful Stimulus and Looser Monetary Policy

China signaled a more forceful approach toward stimulating its economy, including the first loosening of its official stance on monetary policy in more than a decade, as the world's No. 2 economy braces for potentially escalating trade tensions with the incoming Trump administration.

China Inflation Data Signals Continued Demand Weakness China Auto Sales Sustain Momentum on Subsidies, Campaigns China Forex Reserves Climbed in November RBA Set To Keep Rates Steady While Growth Concerns Linger By James Glynn

The board of the Reserve Bank of Australia is expected to keep interest rates unchanged at its policy meeting on Tuesday. However, the discussion around monetary policy will be held amid growing concerns about the underlying health of the economy and its future prospects.

A key question for the nine-member board, which includes RBA Gov. Michele Bullock and Treasury Secretary Steven Kennedy, will be why the economy is performing so poorly, and regressing in key defining areas like productivity growth.

With a federal election slated for the first half of next year, the economic backdrop for political debates in the country is shaping up to be grim.

Read more .

U.S. Economy How Did Taylor Swift Fans Juice the Economy?

When Taylor Swift comes to town, people open up their wallets. Such is the power of the 34-year-old singer-songwriter billionaire, whose record-busting Eras Tour ends Sunday. The extravaganza-spread across two years, five continents and 149 shows-is estimated to have sold roughly 10 million tickets generating around $2 billion in revenue , based on WSJ calculations.

Hiring Bounced Back With 227,000 Jobs Added Last Month

The labor market bounced back last month . Workers sidelined by storms got back on the job, and thousands of striking Boeing employees returned to work. The U.S. added a seasonally adjusted 227,000 jobs in November, the Labor Department reported Friday.

Consumer Confidence Jumps

Consumer confidence surged this month on a better assessment of the U.S. economy, though opinions continued to diverge between Republicans and Democrats, with inflation expectations also ticking higher.

Why Tariffs Could Really Pinch Retailers This Time

Many retailers came through relatively unscathed by Donald Trump's tariffs imposed starting in 2018. This time around, though, tariffs have the potential to bite more .

NYC Largest Office Landlord Offers Glimpse of the Market's Comeback

Few property owners felt the office-market turmoil as intensely as SL Green Realty . The largest owner of New York City office space suffered a surge in vacancy when the pandemic emptied out the city's office canyons and the firm struggled to find new tenants.

Forward Guidance Monday (all times ET)

10 a.m.: Monthly Wholesale Trade

10 a.m.: Employment Trends Index

Tuesday

6 a.m.: NFIB Index of Small Business Optimism

8:30 a.m.: Revised Productivity and Costs

9 a.m.: Johnson Redbook Retail Sales Index

10 a.m.: Quarterly Financial Report - Industry

10 a.m.: Quarterly Financial Report - Retail Trade

Research Fed Still Expected to Cut Despite Labor Resilience

The Fed is still likely to cut interest rates by 25 basis points this month, even though the U.S. labor market remains resilient, Pepperstone's Michael Brown writes. November payrolls were 227,000, up from 36,000 in October, while unemployment rose slightly to 4.2% from 4.1% and wage growth was steady at 4%. Brown says that the Fed "will seek not to over-react to a single data point, particularly when incoming figures remain skewed by a number of one-off factors." If labor resilience persists, "the employment situation could force the FOMC into a slower pace of policy normalization," he says. - Paulo Trevisani

Basis Points Just weeks ahead of President-elect Donald Trump's return to the White House, The Wall Street Journal is convening top executives, politicians and lawmakers to discuss policy, security and the economy at the annual CEO Council Summit in Washington. Most House Republicans these days are loyal to Donald Trump. Few have been as ostentatiously loyal as Billy Long, the jovial Missouri auctioneer who is the president-elect's pick to run the Internal Revenue Service . More adults have moved in with their siblings in recent years, a reflection of how it is becoming harder and more expensive to buy a home or make the rent. The European Union reached a trade deal with four South American countries , strengthening transatlantic ties after Trump threatened tariffs on Mexico, Canada and China. The Japanese economy grew more quickly than initially estimated in the July-September quarter, fueling expectations that the Bank of Japan will raise interest rates soon and lending further strength to the yen. About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to [[e-mail]].

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

12-09-24 0715ET