Policymakers at the US Federal Reserve are expected to bring a measure of Christmas cheer to borrowers this week, with officials widely forecast to lower interest rates on Wednesday.

An economists’ poll predicted the Federal Open Market Committee (FOMC) will cut its main rate by 25 basis points to take the Fed funds target range to 3.50%-3.75% at the close of its two-day meeting. 

Barclays’ Marc Giannoni maintained his call for a December cut, citing rising downside risks to employment, despite mixed signals from Fed speakers during the inter-meeting period. “Our expectation has been based on labour market indicators showing some weakening, creating enough concern among FOMC members for them to ultimately cut again.” (LS – Continue Reading) 

The Bank of Canada’s Governing Council is widely expected to stay on the sidelines at its final meeting of the year on Wednesday, having previously signalled that monetary policy was likely near the limits of what it could do to support the economy in the current environment. 

Economists broadly expect the Ottawa-based central bank to keep its policy rate unchanged at 2.25%, effectively ending its current easing cycle. 

TD Securities said the policy statement should “strike a more upbeat tone” following the sharp rebound in Q3 GDP and further labour-market strength. At the same time, guidance may highlight recent progress and repeat the bank’s pledge to maintain price stability. (LS – Continue Reading) 

China’s consumer price inflation accelerated in November to the highest level in nearly two years, even as producer price deflation worsened, underscoring the challenge policymakers face in reviving domestic demand amid persistent trade tensions. 

Consumer prices edged up 0.7% from a year earlier, its highest level since February last year, National Bureau of Statistics data showed Wednesday. Consumer inflation extended a 0.2% uptick in October and was in line with the expected 0.7% rise in a Reuters poll of economists. 

Factory-gate prices fell 2.2% in November from a year earlier, missing the forecast of a 2% decline and extending the deflationary stretch into its fourth year. That was compared with a 2.1% fall in October. (CNBC – Continue Reading)