The Day at a Glance | December 11 2023

*Markets are waiting for the last Federal Reserve monetary policy meeting in the U.S. for 2023.

*Consumer prices in China fell at their fastest rate in 3 years, indicating increasing deflationary pressures stemming from weak domestic demand.

*Fears of a Palestinian exodus to Egypt are growing amid the intensification of the conflict in the Middle East.

*The European Union is preparing a summit to discuss Ukraine’s accession to the bloc.

*The Bank of Japan does not see much need to end the negative interest rate in December.

*Argentine markets want a fiscal “kick” to the economy as President Javier Milei’s plan is being prepared.

Economic environment

The week begins in anticipation of the Fed’s monetary policy announcement. This week, the statements of Federal Reserve Chairman Jerome Powell will be of utmost importance and will likely play a key role in market expectations regarding possible future interest rate cuts by the U.S. central bank. For the Fed, we expect the federal funds rate to remain unchanged, but it will be important to observe the dot plot and whether FOMC members indicate the cuts that the markets have been anticipating. While caution remains in the central bank, the possibilities of achieving a “soft landing” remain. Authorities are likely to be reluctant to declare victory over inflation, so we expect little specificity about what will guide authorities on the timing and extent of rate cuts.