increased at a faster-than-expected 2.9% annual rate in the fourth quarter of last year as consumers boosted spending on goods, the US Department of Commerce said.
MSCI’s all-country world index, a gauge of stocks in 47 countries, rose 0.90% to hit a fresh five-month high, while the dollar index rose 0.246%. Futures are pricing a 94.7% probability of a 25-basis-points hike next Wednesday, February 1, and see the Fed’s overnight rate at 4.45% by next December, or lower than the 5.1% rate Fed officials have projected into next year on market expectations of a rate cut.
“On balance, the data being better than expected suggests there’s more resilience in the economy than many have given it credit,” said Joe Manimbo, senior market analyst at Convera in Washington. “The fact that inflation figures in the Q4 data moderated suggests it’s a Goldilocks scenario.” “Investors should not assume that the easy times in the market are coming back,” he said. “I don’t think people should be in a hurry to go back to excessive risk.”