Market Skepticism Grows Over Federal Reserve Rate Cuts Amid Upcoming Economic Reports

Investors await key data on fourth-quarter economic growth and inflation, which could influence central bank's policy direction.

Markets have become less convinced that the Federal Reserve is ready to press the button on interest rate cuts, an issue that cuts at the heart of where the economy and stocks are headed.
Two big economic reports coming up this week could go a long way toward determining at least which way the central bank policymakers could lean — and how markets might react to a turn in monetary policy.
Investors will get their first look at the broad picture of fourth-quarter economic growth for 2023 when the Commerce Department releases its initial gross domestic product estimate on Thursday.
A day later, the Commerce Department will release the December reading on the personal consumption expenditures price index, a favorite Fed inflation gauge.
The consensus expectation for core PCE prices, which exclude the volatile food and energy components, is 0.2% growth for the month and 3% for the full year.