As expected, the U.S. Federal Reserve left its benchmark interest rate unchanged at its last policy meeting of the year Wednesday. The Fed also sent a clear signal that rates have peaked and that it will start a series of cuts at some point next year. (The Logic)

Talking point: The hint that cuts are coming was less expected, prompting a stock rally and the Dow Jones Industrial Average to close at a record high. At a press conference, Fed chair Jerome Powell said that interest rate increases remain on the table, but he did little to dissuade journalists of the notion that his aggressive campaign of hikes is over. The Fed’s “dot plot” of each policy committee member’s forecasts show cuts in 2024, with the median coming in at three-quarters of a percentage point. Officials expressed confidence that inflation will continue to decline back to the central bank’s target of about two per cent without triggering a big spike in unemployment—the so-called soft landing that many forecasts said would be impossible as the Fed raised the benchmark rate to about five per cent from essentially zero during the pandemic.