“It wasn’t raining when Noah built the ark.” — Howard Ruff

1. U.S. Home Prices Gained Further Toward End of 2024 — the S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the country, rose 3.8% on year in November 2024, up from 3.6% in October 2024, a monthly indicator reported. The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay and reflects a three-month moving average. Homes usually go under contract a month or two before they close, so the November data are based on purchase decisions made earlier in 2024. New York again reported the highest annual gain among the 20 cities surveyed, with a 7.3% increase in November, followed by Chicago and Washington, D.C., with annual increases of 6.2% and 5.9% respectively, S&P said.
Tampa, Fla., posted the lowest return, falling 0.4%, the first annual drop for any market in more than a year in once-hot Florida, Luke noted.
2. Fed Stands Pat on Rates, Entering New Wait-and-See Phase — The decision on Wednesday to leave the benchmark federal-funds rate at its current range around 4.3% followed three consecutive rate cuts beginning in September, when the rate stood around 5.3%. With interest rates now “significantly less restrictive” than they were before last year’s cuts, “we do not need to be in a hurry to adjust our policy stance,” said Fed Chair Jerome Powell at a news conference after the meeting. After Powell spoke, President Trump slammed the Fed and its leader for allowing inflation to accelerate four years ago and promised to put a lid on price increases. “I will do it by unleashing American Energy, slashing Regulation, rebalancing International Trade, and reigniting American manufacturing,” he said in a post on his social-media site.
3. U.S. GDP Grew 2.5% in 2024, but Slowed Slightly in Final Quarter — U.S. gross domestic product—the value of all goods and services produced across the economy—grew 2.5% last year, the Commerce Department said Thursday. That was slower than 3.2% in 2023 but still a sturdy pace. The year-over-year GDP growth reflects the fourth-quarter change from a year earlier. Economists surveyed by The Wall Street Journal and the Federal Reserve use that metric for forecasts. The Fed expects the economy to grow 2.1% this year and 1.8% in the longer run. The economy is entering an uncertain 2025. Economists tend to believe that the Trump administration’s proposals on tariffs and deportations will hurt growth and stoke inflation. Trump advisers have said that plans to cut regulation and boost energy production will offset the effects of higher goods prices.
4. PCE Inflation Accelerated in December — The personal-consumption-expenditures price index rose by 0.3% last month, compared with 0.1% in November, contributing to a 2.6% increase over all of 2024. Excluding volatile food and energy prices, the core version of the PCE price index rose by 0.2% last month, compared with 0.1% in November, and by 2.8% over the past 12 months. December was the third straight month that core PCE inflation stalled at 2.8%. After peaking above 5.6% in 2022, core PCE inflation fell to 2.6% last June but then reaccelerated. The Fed wants to see PCE inflation fall back to its 2% target, but in December, officials projected that still might take until 2027. Slower progress on inflation led the Fed to hold interest rates steady this week, breaking a string of rate cuts that had begun in September.

The week ahead — Economic data from Econoday.com:

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