Is The Fed About To Pivot?

Good morning. US stock futures moved higher in Thursday morning trading as investors digested news of the Federal Reserve’s plan for multiple rate cuts in 2024.

🏛️ Fed maintains steady hand on interest rates, signals cuts might be around the corner

📝 Our report: The Federal Reserve played it cool, keeping its benchmark interest rate in a range of 5.25%-5.50%, the highest level in 22 years. But fear not, they dropped a hint that they might sprinkle some rate cuts —75 basis points worth — over the next year.  

 🔑 Key points:

• The Fed has moved in 25-basis-point increments over the last year, indicating the central bank now expects to cut interest rates three times in 2024.

• Fed Chair Jerome Powell reiterated several times at his press conference that the Fed still needs to see more evidence that inflation is moving down to its 2% goal and made it clear the economy could still move in surprising directions next year.

• The Fed chair also declined to provide any guidance on when the Fed might cut rates, but made it clear that Fed officials are beginning the conversation of when to dial back policy restraints.

💡 So what: When the Fed starts cutting interest rates, it typically aims to stimulate economic activity. Here's the lowdown: lower interest rates can encourage borrowing and spending, which, in turn, may boost investment, consumer spending, and overall economic growth. It's like giving the economy a little financial espresso shot.

 Thursday - Initial Jobless Claims (wk end Dec 8)

Friday - No Major Economic News

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🧾 Credit report cleansed of medical debt

WHAT: New York residents can now breathe a sigh of relief knowing that their credit reports are on a diet—no more unexpected visits from the ghost of medical bills past! Governor Kathy Hochul signed a bill, giving unpaid medical debt the boot from credit reports. The law prohibits credit agencies from collecting information about or reporting medical debt. The law also bans hospitals and health care providers in the state from reporting such debt to the agencies.

WHY: New York is the second state after Colorado to enact such a law. A similar nationwide measure is being considered by the federal Consumer Financial Protection Bureau.

🪥 Dental doors close

WHAT: SmileDirectClub, the once-toothy grin guru, seems to have taken a hiatus from its global alignment endeavors, hitting the pause button on those life-changing teeth tweaks. The company announced it was shutting down its global operations and halting teeth-alignment treatments.

WHY: When SmileDirectClub's stock began trading on the stock market in 2019, the company was valued at about $8.9 billion. But the stock plummeted in value over time as the company proved to be unprofitable year after year. In 2022, SmileDirectClub lost $86.4 million.

📰 OpenAI pays up for news content

WHAT: OpenAI, the genius behind ChatGPT, is shelling out big bucks, tens of millions in euros to be exact, to media powerhouse Axel Springer for the VIP access to its treasure trove of news articles and content. Under the agreement, San Francisco-based OpenAI will get to use articles and other content from Axel Springer publications, including Politico, Business Insider, and the European properties Bild and Die Welt.

WHY: OpenAI’s partnership with Axel Springer comes after months of clashes between news publishers and tech companies over how their content can be used to train AI systems. OpenAI and its competitors need extensive amounts of data, including the written word, to power conversational chatbots like ChatGPT.

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