It’s not whether you’re right or wrong that’s important, it’s how much money you make when you’re right and how much you lose when you’re wrong. George Soros

1. Fed Minutes Show Officials Prefer Future Rate Cuts to Be Gradual — Federal Reserve officials indicated broad support for a careful approach to future interest-rate cuts as the economy remains solid and inflation slowly cools, minutes from their latest policy meeting showed. The Fed lowered its benchmark interest rate by a quarter-percentage point earlier this month, to a range of 4.5%-4.75%, following a larger-than-usual, half-point reduction in September. Fed Chair Jerome Powell said earlier this month that the economy is not sending signals policymakers need to be in a hurry to lower rates. Fed officials will gather for their last policy meeting of the year on Dec. 17-18. The record of the November meeting showed some officials said the Fed could pause rate cuts and hold borrowing costs at a restrictive level if inflation remains elevated. Some noted reductions could be accelerated if the economy or labor market deteriorates.
2. US GDP Grows at Solid 2.8% Pace, Helped by Consumer Spending — Gross domestic product increased at a 2.8% annualized pace in the third quarter, the second estimate of the figures from the Bureau of Economic Analysis showed. The economy’s primary growth engine — consumer spending — advanced 3.5%, the most this year. While still strong, household spending was revised modestly lower from the initial reading, reflecting slightly less robust outlays for merchandise. At the same time, business investment in research and development was revised higher.
3. Fed’s Favored Inflation Gauge Picks Up, Backs Cautious Approach — The so-called core personal consumption expenditures price index, which strips out volatile food and energy items, increased 2.8% from October last year and 0.3% from a month earlier, according to Bureau of Economic Analysis data out Wednesday. A good part of that acceleration was due to the impact of higher stock prices on the calculation. On a three-month annualized basis — a metric economists say paints a more accurate picture of the trajectory of inflation — the core PCE price gauge advanced 2.8%. The figures support recent comments by many Fed officials that there’s no rush to cut interest rates so long as the labor market remains healthy and the economy continues to power ahead.
4. Canada Sues Google, Alleging Anticompetitive Online-Ad Practices — In a notice filed Thursday with Canada’s Competition Tribunal, the watchdog—known as the Competition Bureau—said it seeks to “put a decisive end to Google’s structural dominance and anticompetitive practice, [and] restore competition” in the country’s online-advertising marketplace.
The antitrust watchdog wants the tribunal to force the company to sell two crucial pieces of advertising-market software and pay a fine of as much as 3% of the company’s global revenue. The Canadian lawsuit is the latest legal challenge for Google on the antitrust front. Investigators for Canada’s antitrust watchdog started to look into Google’s online-advertising practices in 2020, to verify whether the digital company was impeding competitors, thereby resulting in higher prices and reduced choice. Google is dealing with the fallout from a U.S. federal judge’s ruling last August that the company engaged in illegal practices to preserve its search-engine monopoly.

The week ahead — Economic data from Econoday.com:

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