Recent inflation data suggests the Federal Reserve may decrease interest rates this year. The core Consumer Price Index saw a 0.2% increase in December, which is lower than the projected 0.3%. Traders now anticipate a rate cut in mid-2025.
BMO’s senior economist, Sal Guatieri, highlighted that despite softer inflation metrics, the Fed must continue addressing inflation challenges. The central bank may hold off on rate cuts until there is clarity regarding incoming economic policies.