Good Morning!

Futures in the green at the time of this writing as talking heads focus on today’s Federal Reserve interest rate policy decision as the last major economic event of 2024. Consensus is 25bps cut but the question is what will be their commentary and outlook for 2025?

From Bloomberg

• "Global stocks rebounded on Wednesday as investors awaited the Federal Reserve’s final policy decision of the year.

• Futures contracts for the S&P 500 and Nasdaq 100 advanced 0.2% after both gauges retreated on Tuesday. The Stoxx 600 was set for its first day of gains in five sessions. Asian equities kept steady, snapping a three-day losing streak.

• Commerzbank AG rose after UniCredit SpA said it has boosted its stake in the German lender. In Japan, shares of Nissan Motor Co. jumped the most since at least 1974 on news that the ailing carmaker is exploring a possible merger with Honda Motor Co. Renault SA, Nissan’s biggest shareholder, rose as much as 7.4% in Paris.

• While a quarter-point Fed interest-rate cut is almost fully priced in for Wednesday, investors will focus on the outlook for 2025 as inflation decelerates more slowly than anticipated and the economy remains resilient. The possible impact of key policies under the incoming administration of President-elect Donald Trump adds to the uncertainty.

• Last quarter, the Fed’s so-called dot plot projected a full percentage point of rate cuts for 2025, following a similar magnitude of easing this year. Currently, money markets are pricing in that a cut on Wednesday would be followed by less than two 25 basis-point reductions next year.

• “Today’s decision will be less consensual than what the market expects,” said Florent Wabont, an economist at Ecofi Investissements. “It think it’s the end of back-to-back cuts. The big question is how will Jerome Powell communicate this to the market.”"