After a year of macroeconomic and geopolitical challenges, inflation is beginning to ease, and the Fed is expected to slow down the pace of rate hikes. Federal Reserve Chairman Jerome Powell stated that smaller interest rate increases are likely ahead and could start as soon as this month.
Despite the high inflation, consumer spending has remained firm. According to the Commerce Department, consumer spending increased 0.8% sequentially in October, posting its highest gain since June, driven by spending on rent, food, and new vehicles. Also, the U.S. Census Bureau reported that the overall retail sales in October rose 1.3% sequentially and 8.3% year-over-year.
