With the latest CPI report coming in lower than expected, policymakers signaled smaller interest rate hikes ahead. However, Fed Chair Jerome Powell cautioned that the monetary policy would continue to stay restrictive until some real signs of progress in inflation are seen and indicated that the final level of interest rates would be higher than previously expected.
Moreover, according to the data released by the Labor Department last week, the jobs report came in hotter than expected, with nonfarm payrolls increasing by 263,000 in November, against Dow’s estimates of 200,000. This might prompt the Fed to raise benchmark rates further.
