Weekly Economic Snapshot: Robust Growth Meets Stubborn Inflation

Economic Growth - The U.S. economy experienced robust growth in Q3, with real GDP increasing at an annual rate of 4.4%, up from 3.8% in Q2 and exceeding the 4.3% forecast [1] Inflation Metrics - The Core PCE Price Index rose 2.8% year-over-year in November, consistent with forecasts and slightly up from October, while the headline index also increased by 2.8% annually [2] Consumer Sentiment - The University of Michigan Consumer Sentiment Index increased by 3.5 points (6.6%) to 56.4 in January, surpassing the expected 54.0 reading, although it remains over 20% below the previous year [3] - The "current conditions" subcomponent rose for the first time in six months, and the "expectations" subcomponent increased for the third consecutive month to its highest level since July [4] Market Reactions - The S&P 500 finished the week with a loss of -0.4%, while the SPDR S&P 500 ETF Trust (SPY) also fell -0.4% [6] - The 10-year Treasury yield ended the week at 4.24%, and the 2-year note finished at 3.60% [6] Federal Reserve Outlook - The CME FedWatch Tool indicates a 97% chance that the Federal Reserve will maintain current interest rates at the upcoming meeting, with markets anticipating two 25 basis point cuts in 2026 [7] Upcoming Economic Data - Key economic data releases include Durable Goods Orders, Consumer Confidence Index, and the FOMC Meeting scheduled for the week ahead [8][9]