December Inflation Report, Interest Rates, Shake Shack, Dutch Bros, Walmart & More
How could the market interpret December’s inflation numbers as a signal that the Fed would cut rates sooner than expected? The CPI increased to +2.89% y/y (third consecutive sequential monthly acceleration) while both the Core CPI & PPI growth increased around +3.3% y/y during December.
While most survey participants expressed cautious optimism for 2025, concerns persist over the potential of higher prices resulting from tariff policy changes.
We would like to propose a new Fed model to deal with inflation. Instead of raising interest rates to combat high prices, we propose that the Fed should implement targeted rate cuts to lower prices. Sound crazy? Read on…