Ninety one days

Daily update

The Federal Reserve meeting minutes reflect the rather chaotic swings of view that occur under Fed Chair Powell. After an emergency rate cut without an emergency in September, the Fed has moved to slowing the pace of rate cuts being “appropriate” in December. The basic idea is unchanged— follow inflation down. Concerns were raised about US President-elect Trump’s trade tax and deportation policies in discussions about inflation, but they were not the central focus of the inflation debate.
China’s December inflation data showed basically stable consumer prices. This reflects normalizing food prices (food being a significant weighting for a country like China). Non-food prices had limited increases, in spite of attempts to encourage domestic consumer spending. Producer prices remain mired in deflation.
The UK BRC shop price index fell more than expected, with strong deflation in non-food items (possibly reflecting Black Friday discounts). Combined with sales data, this suggests that UK consumers increased spending in real terms during the fourth quarter, responding to price discounts with more purchases.
German November trade data is due. Trade numbers have not really mattered since the era of fixed exchange rates, but with economic nationalism increasing on all sides trade figures have the potential to be an (imprecise) weapon that politicians use against foreigners.