Federal Reserve Maintained Current Rate Target

The Federal Reserve decided to maintain the target range for the federal funds rate at 5.25%-5.50% for the third straight meeting. Based on Fed projections for interest rates by the end of next year, it appears the Fed anticipates making three rate cuts of 0.25% each over the course of 2024.

Federal Deficit Grew in November

The November deficit for the federal government was $314.0 billion, $247.5 billion above the October deficit and $65.5 billion higher than the November 2022 deficit. Total government receipts in November were $274.8 billion and government outlays totaled $588.8 billion. Through the first two months of fiscal year 2024, the government budget deficit sat at $380.6 billion compared to $336.4 billion over the same period last fiscal year.

Eye on the Week Ahead

The final estimate of third-quarter gross domestic product is available this week. The second estimate had the economy accelerating at an annualized rate of 5.2%. The November data on personal income and outlays is also out this week. Consumer spending rose 0.2% in October, while the personal consumption expenditures price index, a measure of inflation, was flat. Consumer prices continue to inch lower, although they remain above the Federal Reserve’s target of 2.0%.