US inflation numbers are to be announced today, while the US Fed rate hike decision takes place tomorrow. These two significant events may turn out to be a turning point for the stock market investors before moving into 2023. The stock market meltdown witnessed by investors in 2022 may be alleviated by the time these two events take place over the next two days.

Latest Update: US CPI eases to 7.1%, stock market reacts positively

Firstly, the Bureau of Labor Statistics will release the US CPI data for November 2022 on December 13, and secondly, the FOMC meets on December 13-14, after which the Fed announces its decision on a rate hike on December 14. Also, the FOMC’s economic projections are released concurrently with its December 14 decision to raise interest rates.

After reaching a high of 8.3% in August, annual inflation fell to 8.2% in September and 7.7% in October. Following the November inflation figures, it will be interesting to see if the Fed keeps its foot off the brake on the US economy. Markets anticipate a 50 basis point rate increase in December, based on the Fed’s dot plot.

Fed Chief Powell has been crystal clear in the message conveyed to the market – Fed may consider slowing the pace of rate hikes but at the same time the terminal federal funds rate may be significantly higher than what the market expects. What it means is that market needs to put the probability of a Fed Pivot into cold storage, at least for now.

The US Federal Reserve meeting on December 13-14 will be historic and significant for US stock market investors. The Federal Open Market Committee (FOMC) will not only decide the magnitude of the December rate hike but will also reveal projections, heightening the importance of the meeting.

Also Read: Final week of major economic news in 2022 in global markets

Fed projections compile projections from Fed members for the most likely developments in real GDP growth, unemployment, and inflation for each year from 2022 to 2024, as well as over the longer term. The Fed’s projections are significant and provide guidance to the markets.

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