Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Market frustration with the November Consumer Price Index is not about how low inflation printed. It’s about whether the number can be trusted at all. The report showed that annual CPI inflation slowed to 2.7% in November from 3% in September. Indeed, this reinforces President Trump’s narrative that inflation is “essentially gone.” Yet economists and inflation watchers argue that the figure was mechanica ...

The S&P 500 appears poised to snap a four-day losing streak on Thursday as unexpectedly cooler inflation data reignited hopes for Federal Reserve rate cuts in 2026. The rebound was turbocharged by Mic... ...

Core Insights - Buying a new vehicle may become more affordable by late 2026 due to expected easing of price increases, lower borrowing costs, and new tax benefits [1][5][7] Vehicle Pricing Trends - Car prices surged approximately 9% during the pandemic, with the average new vehicle costing about $49,800 in November, reflecting a 1% increase from the previous year [2][4] - Price inflation for 2026 model-year vehicles has been above historical standards, with these vehicles making up about 60% of the current new-vehicle supply [6] Consumer Sentiment and Market Dynamics - Despite improvements in affordability since 2023, consumer sentiment remains negative regarding the timing of vehicle purchases [3][6] - Households are projected to buy 2% to 3% fewer cars in 2026 compared to 2025 [2] Financial Implications - The new tax benefit may provide typical consumers with about $50 more per month, particularly benefiting those with annual incomes up to $100,000 [5][7] - The average monthly payment for a new vehicle currently accounts for 12.8% of median income, which may decrease to 12.3% by late 2026 [6] Market Segmentation - New tax breaks are expected to support sales among middle-income households, while low-income households will likely remain unable to afford new vehicles [7][8]

Economic Overview - Consumers are still spending despite an early chill for the holiday season, with core retail sales up 0.9%, indicating stronger performance than the headline figure suggests [1] - The labor market has shown stagnation in payroll since April, with the unemployment rate affected by government shutdowns leading to temporary layoffs [2] Holiday Season Insights - The holiday season is compressed into December, which previously resulted in strong job gains, suggesting a potential repeat this year [3] Future Economic Indicators - Anticipated rate cuts by the Fed and expansions to tax cuts retroactive to 2025 may lead to double-digit gains in tax refunds, which consumers often treat as windfall gains, potentially affecting inflation data [4] Inflation and Labor Market Dynamics - The labor market is currently driven by healthcare and social assistance sectors, with concerns about the stickiness of inflation persisting even with potential improvements in employment [6][7] - There is a normalization of inflation occurring over five years, with sequential tariff-related increases contributing to this trend [8] Fed's Position and Market Sentiment - The Fed faces a divide between those advocating for lower rates and those concerned about inflation, with the current economic data suggesting that price stability has not been achieved [5][9]

Al Drago / Bloomberg via Getty Images Federal Reserve policy committee members, including Chair Jerome Powell, have been waiting for more up-to-date data on the labor market. Key Takeaways The uptick in unemployment in November shows that the Federal Reserve was justified in cutting interest rates earlier in the year, economists said. The Fed is expected to pause its rate-cutting campaign in January to assess the impact of cuts so far, but the poor jobs report kept a January cut on the table. The Fed ...

Core Viewpoint - U.S. Treasury yields have declined, indicating expectations of further weakness in the labor market and potential Federal Reserve rate cuts next year [1] Economic Data - Key U.S. economic data, including employment figures and CPI data, are set to be released, with expectations of labor market weakness [1] - Employment figures are due on Tuesday, followed by CPI data on Thursday [1] Federal Reserve Outlook - The labor market data may support the possibility of Federal Reserve rate cuts in the upcoming year [1] - Brown Brothers Harriman's Elias Haddad suggests that the FOMC has the capacity to implement the 50 basis points of easing anticipated by Fed funds futures over the next 12 months [1]

Core Insights - The Federal Reserve is experiencing significant divisions among its officials regarding future interest rate cuts, with projections indicating only one cut in 2026, reflecting a wide range of individual forecasts from policymakers [1][10] - A notable minority of seven Fed officials oppose cutting rates in 2026, while eight anticipate at most two cuts next year, and four are considering more aggressive actions [2][10] - The upcoming economic data will be crucial in determining whether a consensus can be reached or if divisions will deepen [3] Economic Outlook - The Fed's median forecasts predict real GDP growth of 2.3% in 2026, an increase from the previous forecast of 1.8% in September, despite a slower anticipated growth of 1.7% for 2025 [7][10] - Fed officials expect the unemployment rate to rise to 4.5% by year-end but project it will decrease back to 4.4% by the end of 2026 [11] - Inflation is expected to decline towards the Fed's 2% target, with forecasts suggesting a deceleration to 2.5% in 2026, slightly better than the previous estimate of 2.6% [12][11] Policy Dynamics - The next Fed chair will face challenges in unifying a committee with a strong hawkish presence, as the current chair's term ends in May [4][6] - President Trump has expressed a desire for lower interest rates, which may influence the selection of the next Fed chair [5][6] - Analysts predict that while the Fed may pause rate cuts in January, further reductions are likely later in the year, with expectations of a 25-basis-point cut in March and June [16][17]

Core Points - The Federal Reserve has cut rates for the third time this year, aligning with expectations, but future decisions may not be as predictable [1] - Fed Chair Jerome Powell has maintained consistency and transparency in his projections, notably forecasting three rate cuts in 2025 [2] - Diverging opinions among Fed members regarding inflation and employment management have led to increased uncertainty, highlighted by three dissenting votes in the latest meeting [3] Summary by Sections Rate Cuts and Projections - The Fed's latest "dot plot" indicates one rate cut is expected next year, but individual forecasts vary significantly among members [4] - Powell's term is set to end in May, with potential changes in leadership that could influence future rate decisions [4] Leadership and Market Reactions - Kevin Hassett, a potential replacement for Powell, has advocated for aggressive rate cuts, raising concerns among investors about inflation management [5] - Investors are prepared to respond to unconventional Fed policies, with "bond vigilantes" historically opposing monetary policies they disagree with [6] Market Stability Concerns - The ongoing tension between investors and the Fed could disrupt the bond market's traditional role as a stable investment [9]

Group 1 - The Federal Reserve's accommodative policies, including rate cuts and balance sheet expansion, may lead to increased risk-taking behavior in the market [1][2][3] - Current low interest rates, with the Fed funds rate at 3.5%, are considered low historically, but they are inducing moderate returns in the debt market [6][7] - The S&P 500's price-to-earnings ratio suggests a low prospect of returns, historically averaging in the low single digits over the next ten years when bought at current levels [7] Group 2 - Concerns about the impact of artificial intelligence and automation on the labor market are significant, with potential job quality deterioration despite job count stability [9][10] - The relationship between job loss due to automation and societal issues, such as the opioid epidemic, highlights the importance of job fulfillment beyond financial compensation [11]

Core Insights - The Federal Reserve has implemented a quarter-point rate cut, marking its third reduction of 2025, totaling 0.75 percentage points for the year, following a 1.00 point cut in late 2024 [2][10] Impact on Savings - The Fed's rate cuts directly influence deposit rates at banks and credit unions, leading to expected lower yields on savings accounts and CDs in the coming weeks, although the decline is anticipated to be modest [3][10] - Current high-yield savings accounts offer competitive returns between 4.15% and 5.00% APY, while the best nationwide CDs reach up to 4.50%, with longer terms providing multi-year returns of 4% or more [12] 2026 Rate Outlook - The Fed's 2026 projections reveal a divided outlook among policymakers, with the median expectation indicating a single quarter-point rate cut, but forecasts range from a 0.25-point hike to cuts of 1.50 points [6][7] - Economic signals are conflicting, with rising unemployment and reaccelerating inflation complicating the Fed's decision-making process, as highlighted by Fed Chair Jerome Powell [8][10] Uncertainty in Rate Policy - The wide distribution of forecasts among Fed officials underscores the uncertainty surrounding future rate movements, making it difficult to predict the trajectory of deposit yields [9][10] - The dot plot serves as guidance rather than a fixed path, indicating that the Fed's internal consensus is not aligned, adding to the unpredictability of future rate changes [9]