The data we have shows that our overall view has not changed.
Inflation is still high.
The labor market seems to be cooling down gradually.
The effects of the government shutdown should be offset by higher growth next quarter.
The GDP growth forecast for 2026 has been revised upward.
The main drivers are steady consumer spending and continued high spending on AI.
Since the October meeting, there have been very few new inflation data.
The risks of inflation rising remain to the upside.
Interest rates are now in a neutral range, neither high nor low.
The Fed will make decisions meeting by meeting.
Purchases of U.S. government bonds to manage reserves may remain high for several months to ease pressure in the money market.
The rate cuts since September (75 basis points) give us room to wait and see how the economy develops.
We have made progress in reducing inflation, especially non-tariff-related inflation.
It does not feel like the economy is overheating.
We believe that the job growth in recent months is overstated.
If we exclude tariffs, inflation would be around 2%.
AI is one of the reasons for the weak labor market, but not the main one.