Monday Morning Meeting Notes (12/19/2022)

General Info:

• The Federal Reserve (Fed) raised interest rates by 0.50%, bringing the fed funds target rate to a range of 4.25-4.50%
• Chairman Jerome Powell noted in his press conference that the committee unanimously sees further rate hikes, but he also indicated that the pace should slow down as they “feel their way” towards the end of the hiking cycle
• In addition, the Fed updated its Dot Plot estimates and now sees the fed funds rate finishing 2023 at 5.1% (implies a total of 0.75% of rate hikes next year)
• The European Central Bank raised interest rates by 0.50%, bringing its main refinancing rate to 2.50%
• Fun Fact: Lord Byron, the famous Romantic-period poet, kept a bear in his college dorm. Trinity College (Cambridge, England) didn’t allow dogs on campus, so he decided to rebel by bringing a tame bear with him. As the rules didn’t explicitly state he couldn’t bring a bear to campus, he celebrated victory by taking the bear on walks around the campus

Monday 12/19:

• European Union energy ministers meet to resume talks over a winter price cap for natural gas

Tuesday 12/20:

• Nike reports earnings
• Bank of Japan (BOJ) monetary policy decision
• Eurozone consumer confidence
• U.S. housing starts for November

Wednesday 12/21:

• December Solstice, which marks the first day of winter in the Northern Hemisphere and of summer in the Southern Hemisphere
• U.S. existing home sales for November
• U.S. Conference Board consumer confidence data for December

Thursday 12/22:

• U.S. Conference Board leading index
• Third reading of Q3 GDP data for the U.S. and U.K. (no changes expected from previous readings)

Friday 12/23:

• U.S. stock markets are open all day, and U.S. bond markets close early (2pm)
• November reading of the U.S. personal consumption expenditure (PCE), which is the Federal Reserve’s preferred inflation measure
• PCE is expected to have increased 0.1% month-over-month and 5.5% year-over-year
• Core PCE, which excludes volatile food and energy costs, is expected to have increased 0.2% month-over-month and 4.7% year-over-year
• U.S. personal income and spending, new home sales, and durable goods orders for November
• University of Michigan consumer sentiment for December