The Balance Today. News You Need To Know on Dec. 5, 2022

The Fed’s Blackout Period and What To Expect

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We are entering what’s known as the “blackout” period at the Federal Reserve, when policymakers stay quiet ahead of their next meeting, which is on Tuesday and Wednesday of next week. In that meeting, they will decide how much they will hike interest rates.

Last week, investors got an indication from Fed Chair Jerome Powell that the bank was interested in “moderating” its pace of rate hikes going forward, giving everyone optimism that we might only see a hike of 50 basis points (half a percentage point). The previous four rate hikes have been 75 basis points.

Fed funds futures market data suggest traders currently believe there is roughly a 75% chance of a more moderate rate hike next week.

This week, we’ll get a further glimpse of where prices are headed when the Producer Price Index (PPI) is released, which measures wholesale inflation. PPI is a useful leading indicator for us shoppers, because if wholesale prices rise, costs are often passed on to us in the stores. 

The Fed’s G.19 consumer credit report also comes out this week, which will indicate the financial strength of American households via household wealth and debt figures.

Stocks are falling today as investors digest the last round of corporate earnings and wait for a decision from the Fed. Friday’s strong jobs report added to worries, as it suggested the labor market is still going strong despite the Fed’s rate hikes. With the jobs market acting as a proxy for the U.S. economy, the strong report indicates that the economy isn’t slowing down enough, which raises the likelihood that the Fed will continue to stay aggressive in its inflation fight. 

-Kristin

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Federal Reserve. "Speech, November 30, 2022, Inflation and the Labor Market."

  2. Federal Reserve. "Policy Tools, Open Market Operations."

  3. CME FedWatch Tool. "Target Rate Probabilities for 14 Dec 2022 Fed Meeting."

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