Next week’s Federal Reserve policy meeting, the last one in 2024, will set the tone for markets heading into year-end and shed light on what investors can expect in 2025. There will also be key inflation data. Wall Street is certain it knows what is coming at the conclusion of the Dec. 17-18 central bank meeting. Fed funds futures pricing shows a 97% likelihood that the Fed bank will lower its benchmark lending rate by a quarter-percentage point, to a target range between 4.25% and 4.50%, down from the 4.50% to 4.75% today. But the meeting will also bring the Fed’s quarterly summary of economic projections , or “dot plot,” showing how policymakers regard inflation and the jobs market in the year ahead and the outlook for further interest rate reductions. Markets are pricing in dovish expectations, projecting three or four more rate cuts, meaning fed funds could eventually be lowered to somewhere between 3.50% and 4.0%. If those forecasts hold true, that could give the year-end stock market rally, which has stumbled this week, one more upward push. .SPX YTD mountain S & P 500 “You might see interest rates fall, and you might see the dollar fall, and you might see tech stocks go higher, if that’s the case,” said Joe Tigay, portfolio manager at the Rational Equity Armor Fund. “It is the Fed’s responsibility to normalize interest rates,” Tigay continued. “I think they’re going to stick with that decision for the time being.” The Dow Jones Industrial Average and the S & P 500 took a reprieve from their year-end rally this week, down 1.6% and 0.6%, respectively, as of Thursday’s close. The tech-heavy Nasdaq Composite was the only major benchmark headed for a winning week, albeit by a slight 0.2%. Stubborn inflation The Fed’s preferred inflation gauge will also be released next week, on Friday after the Fed meeting wraps up. Economists polled by FactSet expect the personal consumption expenditures price index eased on a monthly basis in November, to 0.17% from 0.24%, but ticked higher on annual basis, to 2.5% from 2.3%. Core PCE, which excludes volatile food and energy prices, is expected to have risen 0.22%, down from 0.27% on the month, and to an annual rate of 2.9% versus 2.8% in October. If the PCE report confirms the recent trend of sticky inflation, that could hinder a market that is already regarded by many as expensive. Investors worry that inflation could resurface as a concern next year should President-elect Donald Trump follow through on his campaign promises of mass deportations and steep tariffs imposed on imported goods. Some investors say the risk of inflation means it is time to play defense. JPMorgan’s David Kelly said he recommends investors should allocate a 50-30-20 portfolio, or 50% stocks, 30% bonds and 20% alternatives, to benefit from diversified returns. Investors have taken recent reports showing hotter prices in stride , confident they will not dent broad macroeconomic strength. “I do still think we’re still in a bull market,” Tigay said. “Even if there’s inflation, it’s not going to change for me as long as we have an economy that is growing.” Major corporations will also report financial results next week, with Micron Technology earnings due Wednesday, and Nike , FedEx and Darden Restaurants on Thursday. Week ahead calendar All times ET. Monday, Dec. 16 8:30 a.m. Empire State Index (December) 9:45 a.m. PMI Composite preliminary (December) 9:45 a.m. PMI Manufacturing preliminary (December) 9:45 a.m. PMI Services preliminary (December) Tuesday, Dec. 17 8:30 a.m. Retail Sales (November) 8:30 a.m. Capacity Utilization (November) 9:15 a.m. Industrial Production (November) 9:15 a.m. Manufacturing Production (November) 10 a.m. Business Inventories (October) 10 a.m. NAHB Housing Market Index (December) Earnings: Amentum Holdings Wednesday, Dec. 18 8:30 a.m. Building Permits preliminary (November) 8:30 a.m. Current Account (Q3) 8:30 a.m. Housing Starts (November) 2 p.m. FOMC Meeting 2 p.m. Fed Funds Target Upper Bound Earnings: Micron Technology , Lennar , General Mills Thursday, Dec. 19 8:30 a.m. Continuing Jobless Claims (12/07) 8:30 a.m. GDP Chain Price final (Q3) 8:30 a.m. GDP final (Q3) 8:30 a.m. Initial Claims (12/14) 8:30 a.m. Philadelphia Fed Index (December) 10 a.m. Existing Home Sales (November) 10 a.m. Leading Indicators (November) 11 a.m. Kansas City Fed Manufacturing Index (December) Earnings: Nike , FedEx , Conagra Brands , Darden Restaurants, CarMax Friday, Dec. 20 8:30 a.m. Core PCE Deflator (November) 8:30 a.m. PCE Deflator (November) 8:30 a.m. Personal Consumption Expenditure (November) 8:30 a.m. Personal Income (November) 10 a.m. Michigan Sentiment final (December)