Federal Reserve Should Pause Interest Rate Cu

Despite recent inflation data showing a slight increase to 2.7% in November (up from 2.6% in October) and core CPI inflation remaining at 3.3% for the fourth consecutive month, the Federal Reserve should pause further interest rate cuts.

While markets interpret this data as expected and anticipate another rate cut, the key question is whether inflation is on track to meet the Fed's 2% target; current indicators, such as persistent core inflation and a tight labor market with rising wages, suggest this is not yet the case.

Furthermore, upcoming economic factors like potential new tariffs and tax cuts under the incoming administration could exert upward pressure on prices, making a rate cut premature and potentially counterproductive to achieving the Fed's inflation goals.