U.S. economy Archives -

A decline in U.S. Consumer Borrowing in November: Consumer borrowing in the U.S. slowed in November 2024,
with total credit balances dropping to $5.1 trillion.
This marks the first decline since March 2024 and the largest since August 2023 (-4.25%).

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Decline in U.S. Consumer Borrowing
Inflation Shows Little Progress
Canadian Oil Imports

Decline in U.S. Consumer Borrowing in November Amid Falling Revolving Credit

Consumer borrowing in the U.S. slowed in November 2024,
with total credit balances dropping to $5.1 trillion.
This marks the first decline since March 2024 and the largest since August 2023 (-4.25%).

According to Federal Reserve data released on Wednesday,
consumer credit decreased by $7.5 billion, or 1.8% year-on-year,
following a 4.1% increase in October, contrary to forecasts of a $10.3 billion rise.

Revolving credit, such as credit card debt, fell by 12% year-on-year to $1.359 trillion,
compared to a 13.4% rise in October.
Meanwhile, non-revolving credit, including auto and student loans,
rose by 2% year-on-year to $3.743 trillion,
accelerating from a 0.7% increase in the previous month.

Janet Yellen: Inflation Shows Little Progress, U.S. Job Market Remains Stable

Outgoing U.S. Treasury Secretary Janet Yellen stated
that inflation in the United States has not made significant progress over the past two months,
emphasizing the need for cautious and sustainable fiscal and monetary policy responses.

In an interview with CNBC, Yellen noted that the U.S. job market remains stable despite noticeable slowdowns.
She attributed inflation largely to supply shortages,
while pandemic-related spending had only a limited and inconclusive impact on price increases.

Regarding fixed-income markets,
Yellen highlighted that term premiums are returning to normal levels
and stressed the importance of aligning U.S. fiscal policy with long-term economic stability.
She also mentioned that recent economic data suggests interest rates may rise higher than anticipated,
necessitating close monitoring of market developments.

Yellen also emphasized the importance of responsibly handling expiring tax cuts,
warning that defunding the IRS could increase the federal deficit by $800 billion.
She underscored the need for balanced financial decisions to maintain economic stability.

Record High Canadian Oil Imports to the U.S. Ahead of Trump Presidency

According to the U.S. Energy Information Administration,
U.S. imports of Canadian oil reached a record high last week,
hitting 4.42 million barrels daily for the week ending January 3.

This surge comes just weeks before President-elect Donald Trump assumes office on January 20,
amid expectations of stricter tariffs on oil imports as part of his promises to secure the U.S.-Canada border.

A Decline in U.S. Consumer Borrowing in November

Federal Reserve Committee’s Directions: Analysis of the Latest Meeting Minutes: The latest minutes of the Federal Open Market Committee (FOMC)
meeting highlighted several key observations regarding the developments in the U.S. economy and inflation.
The discussion included views on inflation progress, the balance of economic risks, and future monetary policy directions.
Against this backdrop, members agreed that the current conditions warrant
a gradual easing of monetary policy to align with recent developments.
The report outlines the key points discussed during the meeting and how they may influence the future economic path.

Content
Details
Inflation

Details

Federal Reserve members indicated that inflation has made progress toward achieving the committee’s goal,
but it remains somewhat elevated.

Most members expressed confidence that inflation is moving sustainably towards the 2% target.

They noted that economic activity continued to expand steadily,
job gains slowed, and the unemployment rate rose slightly but remained low.

Almost all participants agreed that risks related to employment and inflation are largely balanced.

Members believed it was an appropriate time to ease monetary
policy in light of inflation progress and balanced risks.

Most participants supported a 50 basis point cut in the federal funds rate,
affirming that it aligns with recent inflation and labor market indicators.

Members emphasized that this move would bolster the economy
and labor market while continuing to make progress on inflation.

Some participants pointed out that a 25 basis point rate cut
was reasonable at the previous meeting and that recent data confirmed this path.

Inflation

Some members noted that inflation remained high despite economic growth

and unemployment at low levels and preferred a 25-basis-point rate cut at this meeting.

Some members believed that a 25 basis point cut aligns with a gradual approach,
allowing more time to assess the impact of monetary policy.

Others considered that a 25 basis point move could provide a more stable path for normalizing monetary policy.

Participants agreed that it was appropriate to continue reducing the Federal Reserve’s securities holdings.

Participants anticipated that further rate cuts might be appropriate
if inflation continued to decline toward 2% and the economy neared full employment.

Members emphasized that the policy adjustment in this meeting should
not be interpreted as a sign of worsening economic
conditions or an indication of a faster pace of easing than expected.

Members stressed the importance of clarifying that the committee’s
monetary policy decisions depend on economic developments and are not on a predetermined path.

The members discussed monetary policy risks, noting that upside risks

to inflation have receded while risks related to employment have increased.

Some members expressed concern that delaying monetary
policy easing could negatively affect the economy and employment.

Others indicated that early policy easing might hinder or reverse progress on inflation.

Members concluded by noting that uncertainty about the neutral interest
rate level in the long term complicates policy assessment and makes gradual action necessary.

Federal Reserve Committee’s Directions: Analysis of the Latest Meeting Minutes