There has been a lot of speculation about what Donald Trump’s re-election means for US inflation and interest rates – but the Federal Reserve's next decision will be guided by the data that is in front of it.
November consumer price index (CPI) inflation figures will be released on Wednesday, and economists expect a headline annual rate of 2.6 per cent. Well-behaved numbers would strengthen the case for another 25 basis point (bps) cut later this month, taking the Fed's target range to 4.25-4.5 per cent.
European Central Bank rate-setters will also convene on Thursday, and there will be lively debate between the hawks and doves on the committee. A ‘double’ 50bps cut is possible, but a 25bps reduction (taking the deposit rate to 3 per cent) looks likely. In the UK, December’s GfK confidence data will be released on Friday. After a jittery start to the fourth quarter, retailers will be hoping for signs of a consumer rebound just in time for some Christmas shopping.