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PCE Report in Focus; India Central Bank Cuts Rates by Quarter Point
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Federal Reserve officials will eye a delayed reading of their favored inflation reading this morning. Economists polled by The Wall Street Journal project the personal-consumption expenditures price index accelerated slightly in September. The PCE gauge will likely be the last inflation reading out before the Fed's policy decision on Wednesday, when it is widely expected to cut interest rates again. Investors will also look to the University of Michigan's preliminary December consumer-confidence report. Meanwhile, the Reserve Bank of India on Friday cut its key policy rate, snapping a two-meeting run of pauses as cooling inflation creates room to lend the economy more support against tariff risks. The central bank also voted to keep its monetary policy stance at neutral.
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Why Investors See the PCE as a Gut Check of Vibes on the Economy
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Photo: Eduardo Munoz Alvarez/Getty Images
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Persistent inflation worries and souring consumer sentiment are keeping investors uneasy ahead of the Federal Reserve’s last policy meeting of the year.
That’s why Friday’s release of the September report for the Fed’s preferred inflation gauge—the personal consumption expenditures price index—comes at a crucial time for investors. The hope is that the new PCE report, while delayed, will provide a hard-data reality check that will either confirm the downbeat economic mood or prove, once again, that the vibes are all wrong.
Economists polled by the Wall Street Journal expect September PCE to rise 0.3% for the headline measure, but by a smaller 0.2% for the more closely followed core measure. On an annual basis, the headline PCE is forecast to remain unchanged at 2.9% in September, while core inflation could see a 2.8% increase from a year ago. (MarketWatch)
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India Central Bank Delivers Rate Cut to Boost Economy
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The Reserve Bank of India on Friday voted unanimously to lower its policy repo rate to 5.25% from 5.50%. Most economists surveyed by The Wall Street Journal had expected the RBI to resume easing, despite India’s economy outperforming expectations in the last quarter.
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Winners and Losers in a Fannie, Freddie IPO
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President Trump and his appointees have spent months teasing a blockbuster stock offering of Fannie Mae and Freddie Mac that could partially free the mortgage giants from government ownership and reap billions of dollars.
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Jobless Claims Fell During Thanksgiving Week
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Newly filed unemployment claims dropped to the lowest level in three years over Thanksgiving week, the Labor Department said Thursday, a reassuring signal about the health of the labor market. About 191,000 Americans filed for new unemployment benefits in the week through Nov. 29. That was down from 218,000 a week earlier and the fewest since September 2022.
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Two Types of Shoppers Are Powering Holiday Spending
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Do You Really Know What’s Inside Your 401(k)?
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Key Developments Around the World
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Canada’s Carney to Hold ‘Brief’ Meeting With Trump on Friday
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Canadian Prime Minister Mark Carney expects to have a "brief meeting" with President Trump in Washington on Friday while the two leaders attend the World Cup draw at the Kennedy Center, a spokeswoman said.
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Eurozone Economy Posts Stronger Growth on Investment Rebound
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German Factory Orders Rise Again
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German manufacturing orders rose again in October, driven by an uptick in domestic demand and signaling continued resilience in the factory sector amid trade uncertainty.
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Putin and Modi Deepen Relationship That Has Drawn Trump’s Anger
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Russian President Vladimir Putin is embarking on a high-profile visit to India, aiming to protect a partnership that is a crucial economic and diplomatic lifeline for Moscow but one that has drawn the ire of the Trump administration.
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World Food Prices Fall for Third Straight Month
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Sens. Warren and Reed Call for Tighter Credit Rules
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Democratic Sens. Elizabeth Warren and Jack Reed are calling for U.S. banking regulators to take immediate steps to tighten rules and requirements for banks engaged in private credit, as well as run a private-credit stress test to evaluate the size and interconnectedness of the market.
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Wall Street Wants In on the ‘Trump Accounts’ for Babies
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It took four years—and one important poker game—but a plan to set up investment accounts for young Americans is moving forward. Banks, brokers and money managers are eager to find a role in the program.
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GPB Fraud Perpetrator May Avoid Forfeiting Over $15 Million
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David Gentile, the GPB Capital founder freed from federal prison last week by President Trump, might also avoid forfeiting about $15.6 million sought by prosecutors following his conviction on criminal fraud and conspiracy charges involving more than $1.7 billion and 17,000 private-equity investors.
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10 a.m.: Personal Income and Outlays
10 a.m.: University of Michigan Survey of Consumers - preliminary
3 p.m.: Consumer Credit
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7:15 p.m.: Manpower U.K. Employment Outlook Survey
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Fed's Rate Path Looks Uncertain in 2H 2026
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The path for the Federal Reserve's monetary policy in the second half of 2026 remains highly uncertain, T. Rowe Price's Blerina Uruci says in a note. "My biggest disagreement with the market is the pricing of cuts in the first half of 2026, which I think is too dovish," the U.S. chief economist says. That depends not only on the evolution of macro data, but also on the reaction function of the new Fed leadership, she says. If inflation reaccelerates from the current quarter and growth is solid--as Uruci expects--then the Fed won't be able to deliver on the market pricing of further easing into next year. The Fed could pause rate cuts after the December meeting, she says. —Emese Bartha
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U.S. Treasurys Look Expensive, Could Be Vulnerable to Selling
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U.S. Treasurys look expensive, making them less appealing, Insight Investment's April LaRusse said at the Edelman Smithfield Investor Summit. The government bonds have priced in anticipated interest-rate cuts from the U.S. Federal Reserve, LaRusse said. However, they risk falling "if there is any concern over U.S. inflation or concerns about a possible change in how the Fed behaves," she said. —Miriam Mukuru
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Indian Central Bank's Easing Cycle Likely Over
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The Reserve Bank of India's easing cycle is likely over, ANZ economists write in a note. The RBI will continue to support the economy through liquidity, and more open market bond purchases are possible. A benign inflation outlook provided the RBI space to ease rates and support growth, which makes sense amid U.S. tariffs and some high-frequency indicators indicating softness in activity, they add. "With weak exports and U.S. tariffs threatening trade and manufacturing, future growth could ease," they say. The rupee may depreciate further in a calibrated manner if the U.S. tariff overhang persists for longer, they add. —Kimberley Kao
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WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.
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