Fed Interest Rate Decision: Weighing Instead of Rushing

Recent inflation data in the USA is fueling discussions about the Federal Reserve's interest rate policy. Investors interpret the figures as an invitation to cut another quarter point from short-term interest rates. Nevertheless, a cautious approach seems more urgent than ever. Although further rate cuts will likely be necessary for 2025, at present, a pause seems more advisable. Consumer price inflation rose to 2.7% in November, compared to 2.6% in October. Excluding food and energy costs, core inflation held steady at 3.3% for the fourth consecutive time. These figures have been largely received by the markets as expected, without warranting an adjustment in forecasts for another rate cut. However, the real criterion remains whether inflation is on track to reach its targeted 2% goal.