The fed responds to unemployment and inflation (hiking rates cools down economy and combats inflation). It targets a 2% inflation rate. Inflation is currently at 2.90%
The fed generally optimizes for "maximum employment"; when unemployment is around 4%. Unemployment is currently at 4.0%, an incremental change of -0.1% from 1 month ago, and -0.2% from 6 months ago.
Due to the factors above, Kalshi puts the probability of "Will the Federal Reserve Hike rates by 0bps at their March 2025 meeting?" at 92%. The current effective fed funds rate is 4.33%. (Avg. Nat'l Mortgage Rate @ 6.89%).
Latest Yield Curve is at 0.2 (10 yr - 2 yr), signaling that investors have expectations of moderate economic growth in the near term. Based on trailing 2 year data, this can be seen as recovering from inversion or stabilizing. Compared to last 10 years:
Consumer Sentiment is at 74 (as of 2024-12-01), implying that consumers are cautious or uncertain (70-90) on the future of the US economy.
Household Debt Service Ratio is at 11.30%. This includes credit card and mortgage debt; it's a measure of how levered US households are. Compared to the last 10 years: