06:37 AM EST, 12/16/2024 (MT Newswires) -- US equity investors will watch out for the Federal Reserve's policy statement this week, looking for views on the path ahead for interest rates this year as the recent price data sparked a debate over the strength of the disinflationary trend.

* Last week, the headline and core consumer price index rose in November, matching expectations. For the producer price index, the data came in hotter than forecast, abetting concern the Fed will pause its easing cycle after its widely anticipated 25 basis-point cut on Wednesday for December.

* The probability of a rate cut in January has fallen to 17%, down from Friday, a week, and a month ago, the FedWatch Tool data showed early Monday.

* The highest probability for rates a year from now is 3.75% to 4%, versus the current 4.5% to 4.75%. "Recent strength in the US economy, including prices and wage figures, lends toward a higher for longer bias," Scotiabank said in a note Friday.

* Apart from the focus on the Fed's updated Summary of Economic Projections and Chair Jerome Powell's press briefing on Wednesday, the focus will also be on retail sales on Tuesday. The Fed's preferred inflation data, the Personal Consumer Expenditures Price index is due Friday, after the policy decision for December, undermining its importance because more economic data will be out before the Fed's next meeting on Jan. 29.

* Scotiabank said the "massive uncertainty" surrounding the Trump administration's policies relating to tariffs, regulatory change, immigration policy shifts, and net fiscal policy shifts on tax and spending combined means that investors will focus on how the FOMC shifts on Jan. 29 -- nine days after the Presidential inauguration day -- and the next SEP and dot plot in March.

* Investors will watch government bond yields closely, as the US 10-year Treasury yield jumped to 4.39% on Friday from 4.14% a week ago, its highest in three weeks, due in part to the uncertainty surrounding the strength of the US disinflationary trend.