US stock futures are pointing slightly lower as traders brace for critical inflation data today, which could significantly influence the Federal Reserve’s upcoming decisions on interest rates. Wall Street’s main averages pulled back yesterday after a multi-day rally fueled by Donald Trump’s recent election victory. Markets are betting on a new era of tax cuts and looser regulation under Trump’s second term. However, some economists caution that these moves could drive inflation up, potentially impacting the Fed’s pace of rate cuts.
Fed officials are keeping a close watch on inflation. Richmond Fed President Thomas Barkin said the Fed stands ready to act if inflation pressures reignite. Traders are now eyeing the October US consumer price index (CPI), set for release today, which is projected to reflect an uptick in annual inflation to 2.6% from September’s 2.4%. The Fed will likely scrutinize both headline and core inflation metrics as it considers additional rate cuts, with current market odds suggesting a 62.4% likelihood of a quarter-point cut in December.
Trump’s Government Efficiency Overhaul
In a post-election move, President-elect Trump announced a new “Department of Government Efficiency” (DOGE), led by Tesla’s Elon Musk and entrepreneur Vivek Ramaswamy. Trump called the DOGE initiative the “Manhattan Project of our time,” aimed at streamlining federal agencies, reducing regulations, and eliminating government inefficiencies. Trump’s goal is to create an “entrepreneurial approach” to governance, hoping these structural reforms will boost economic resilience.
Bitcoin, Oil, and Spirit Airlines Headline Asset Moves
Bitcoin, previously surging on Trump’s commitment to making the US a global “crypto capital,” cooled off slightly today after a record-breaking climb. Oil prices also steadied near recent lows, with Brent crude at $71.93 and US WTI at $68.14 as OPEC lowered its global demand forecasts, citing weak demand from China.
In corporate news, Spirit Airlines’ shares plunged more than 60% in premarket trading following reports of imminent bankruptcy after merger talks with Frontier Airlines collapsed. Frontier reportedly exited discussions, and Spirit has entered advanced talks with bondholders to work out a bankruptcy plan.
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