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Fed’s Collins leaves December rate cut in question
Fed’s Susan Collins signaled that a December rate cut remains uncertain, emphasizing the need for more data, while UK GDP growth slowed sharply in Q3, and US retail sales beat expectations with a 0.4% rise in October
Fed’s Collins: December rate cut uncertain, data-dependent
UK Q3 GDP grew 0.1%, missing forecasts
US retail sales rose 0.4% in October, beating forecasts
Boston Federal Reserve President Susan Collins has cast uncertainty on the likelihood of a December interest rate cut, stating that while it is "certainly on the table," it is far from a foregone conclusion. Speaking in an interview with The Wall Street Journal, Collins underscored the pivotal role upcoming economic data will play in the Federal Reserve's decision-making.
“There’s more data that we will see between now and December, and we’ll have to continue to weigh what makes sense,” Collins remarked, signaling a cautious approach amid an evolving economic landscape.
Collins expressed a pragmatic stance, noting, “I don’t see an argument for maintaining restrictive policy when there is no evidence of new price pressures.” However, she acknowledged that inflationary trends, while showing signs of easing, remain a concern, stating they are “perhaps unevenly and gradually resolving over time.”
UK economy stumbles with slower-than-expected growth
The UK economy expanded by a mere 0.1% in the third quarter of 2024, marking its slowest pace of growth in three quarters, according to preliminary estimates. The figure falls short of the 0.2% forecast and represents a steep slowdown from the 0.5% expansion recorded in the previous quarter.
In September alone, GDP unexpectedly contracted by 0.1%, driven primarily by declines in manufacturing output and the information and communication services sector. The data signals ongoing challenges for the UK economy, which has struggled to maintain momentum amid global economic headwinds and domestic pressures.
US retail sales beat forecasts despite slower growth
Retail sales in the United States rose for a fourth consecutive month in October 2024, increasing by 0.4% from the previous month. While the figure reflects a deceleration from the upwardly revised 0.8% gain in September, it outpaced market expectations of a 0.3% rise.
The data suggests resilient consumer spending, even as the Federal Reserve’s tighter monetary policy continues to weigh on broader economic activity. Analysts will now look to upcoming holiday season trends to gauge whether the momentum in retail can be sustained.
