Good Wednesday morning. Breaking: this morning we got the November read out on inflation with the CPI growing by 2.7% y/y, exactly in line with estimates.  Core inflation rose by .3% m/m, also exactly in line with estimates. Our view remains the same; yes, the Fed will cut rates again next week (by .25%) and yes, the Fed will continue to cut rates throughout 2025. Inflation has not been a story that’s mattered to the markets for more than 2 years, regardless of what the increasingly desperate permabears would have you believe.

Here’s the macro that matters most, when it comes to inflation, interest rates and the market. You won’t hear this in the financial MSM, nor from 99% of mainstream economists whose opinions tend to drift with the wind. We continue to forecast that both rates and inflation will continue to decline going forward. Yes, Trump 2.0 will be a powerful boost for the economy and yes, over the short term that may result in higher rates, with J Powells Fed likely to try ...