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In November, the U.S. Consumer Confidence Index got liquidated with a surprising drop to 88.7, marking the most significant fall in seven months, which is much worse than market expectations. What are the common people really worried about now? Prices, inflation, tariffs, coupled with the ongoing turmoil from Washington, and rumors of a government shutdown resurfacing; these factors combined make it difficult for confidence not to collapse.
The demand side is clearly cooling down. This could be good news for inflation, but it also corners the Federal Reserve—calls for interest rate cuts in the December meeting are likely to become louder. After all, the data is right here; if monetary policy isn't loosened, how can market sentiment be stabilized? For those of us focused on risk assets, once the signal for a policy shift becomes clear, it may serve as a catalyst for the next wave of market activity.