It’s taken a while–what with the distraction of another potential government shut down. BUT IT’S ALL NOW AVAILABLE. You can find the complete version under the Special Reports tab.
It’s now not just that the MAGA wing of the Republican majority in the House of Representatives along with President-elect Donald Trump and who-elected-you co-president wanna be Elon Musk have killed the Continuing Resolution (CR) negotiated with Democrats by Republican Speaker Mike Johnson. That bill would have kept the government’s doors open beyond Saturday’s funding deadline until March 14, 2025. There’s no way to put together a new package and pass it before funding for the government expires. These folks have also made it extremely likely that the shutdown will last for more than a few days. How?
Today, December 18, the Federal Reserve lowered its benchmark interest rate for a third consecutive time.The Open Market Committee voted 11-1 to cut the federal funds rate to a range of 4.25%-4.5%. Cleveland Fed President Beth Hammack voted against the action, preferring to hold rates steady.
Canada is looking at imposing taxes on major commodities it exports to the United States-—including uranium, oil and potash—if the incoming Trump Administration carries out a threat to impose 25% tariffs on Canadian exports.
Inflation remains stubborn. The Consumer Price Index (CPI) rose at a 2.7% annual rate in November, according to Labor Department data released Wednesday. That was hotter than a 2.6% rise in October. But that matched economists forecasts. It was also above September’s 2.4% annual rate. On a monthly basis, inflation increased 0.3% from October to November, the biggest gain since April. Prices for housing, energy, and particularly food all rose.
CPI core inflation, prices excluding volatile food and energy categories, rose another 0.3% for the fourth straight month. The are rate was up 3.3% for the year. For the past six months, core inflation has been stuck at an elevated level above the Fed’s target of 2%.
Words count. And they move stocks when they come from China’s President Xi Jinping and the Politburo ahead of the March session of parliament that will set the budget–and stimulus spending for the year. The words? The Politburo vowed to embrace a “moderately loose” monetary policy in 2025, according to the official Xinhua News Agency. That’s a huge shift from the “prudent” strategy that’s held for nearly 14 years. The last time China adopted a “moderately loose” monetary policy was in the Global Financial Crisis as part of a big stimulus package to prop up the economy.
All eyes will be on the Consumer Price Index inflation report for November due out on the morning of Wednesday, December 11. It’s the last big inflation data dump before the Federal Reserve meets on December 18.
The U.S. economy added 227,000 jobs last month, the Labor Department reported Friday morning, December 6. In addition, revisions added 56,000 jobs to the totals for October and September. Which adds up to a strong recovery from the shocking low 12,000 new jobs initially reported for October. Initial analysis that the almost non-existant growth for October was due to hurricanes and strikes now looks correct. At the same time, the unemployment rate, which is calculated in a survey separate from that which produces the jobs total, ticked up to 4.2% from 4.1%. The jobs total and the unemployment rate were broadly expected by economists. The complete picture is of an economy showing a continued modest expansion. In my opinion, that’s enough to lead to a 25 basis point cut at its December 18 meeting in the Federal Reserve’s benchmark short-term interest rate from the current range of 4.50% to 4.75%. The CME FedWatch took today put the odds od a 25 basis point cut at the December meeting at 85.1%. That’s up from 66% odds a week ago
Oil edged lower–West Texas Intermediate closed down 0.06% and Brent ended 0.08% lower–after OPEC+ announced plans to defer supply increases for three months, but still add barrels starting in April to a market that’s expected to be oversupplied. The Organization of the Petroleum Exporting Countries and its allies agreed to delay their planned output hike.
The forecasts don’t totally agree on the date but they do agree on the trend: Because China’s sales of electric vehicles and hybrids accounted for more than half of retail passenger vehicle sales in the four months from July, the country’s demand for gasoline is near a peak. And unlike in the U.S. and Europe where peaks in consumption were followed by long plateaus, the drop in demand in the world’s top crude importer is expected to be more pronounced. Brokerage CITIC Futures sees Chinese gasoline consumption dropping by 4% to 5% a year through 2030. The
International Energy Agency says demand peaked in 2024 and forecasts a 2.3% decline in 2025.
At 8:30 a.m. on Friday, December 6, investors will see the U.S. jobs report for November. Economists expect that the economy added 200,000 jobs in the month and that for the unemployment rate will hold steady at 4.2%.
Yesterday, Wednesday, November 27, the report from the Bureau of Economic Analysis showed that the Personal Consumption Expenditures index, the Federal Reserve’s preferred inflation measure, had continued the stall that began in May.
