A favorable consensus developed during the week of how the Fed's current series of rate hikes would extend into 2025. Click to read.

Consumer inflation accelerated in October 2024. However, the odds of a Federal Reserve interest rate cut on December 18 are still high.

"Unemployment is going to come down, growth is going to come up, inflation is going to come up," Deutsche Bank's chief US economist said.

When accounting for the various policies, Deutsche Bank estimates the US economy will grow at an annualized rate of 2.5% in 2025, with the rate of unemployment ending the year at 3.9% (down from 4.1% currently) and the Fed's preferred inflation gauge, "core" Personal Consumption Expenditures (PCE), ending 2025 at 2.6%.

Federal Reserve officials expressed confidence that inflation is easing and the labor market is strong, allowing for further interest rate cuts albeit at a gradual pace, according to minutes from the November meeting released Tuesday.

Powell just a week after the meeting said the economy was "not sending any signals that we need to be in a hurry to lower rates."

The account of the central bank’s Nov. 6-7 meeting, released on Tuesday, showed that Fed officials still planned to cut interest rates further. But with the job market holding up better than expected and the economy growing at a solid clip, they are in no rush to slash them rapidly.

Federal Reserve Bank of Minneapolis President Neel Kashkari, typically on the hawkish end of the U.S. central bank's policy spectrum, said on Monday he is open to cutting interest rates again next month.

Inflation rose above the European Central Bank’s target in the eurozone this month, though likely not enough to deter policymakers from cutting interest rates for a third straight meeting next month.