Unless something dramatic happens in the next 24 hours, November CPI will top 2% again. This obviously lends credence to the overwhelming market expectation for a rate hike in December. – even though PCE is still languishing well below target.
Yet, there are still two events in the coming days that could give the Fed pause: the tax bill (due for a vote in the Senate tomorrow) and the debt ceiling (will be reached next Friday.) If either isn’t successfully navigated, will the Fed still have the nerve to raise rates? And, if they don’t, what would that do to markets?
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