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16 February 2024,06:21

CPI Strength Dampens Fed Rate Cut Prospects; Market Focus Turns to FOMC Meeting Minutes for More Cues

16 February 2024, 06:21

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Wednesday, 21 Feb, 21:00 – FOMC Meeting Minutes

In January, the Federal Reserve declared a steady policy rate of 5.25% – 5.5%, acknowledging the uncertain trajectory toward a rate cut in 2024. While many investors are hopeful for a shift from rate hikes to cuts by the Fed in the upcoming months, the robust inflation data indicates a resilient inflation, possibly resulting in the Fed shifting to a less dovish tone than anticipated.

Thursday, 22 Feb, 12:00 – Euro CPI (YoY)

Eurozone inflation continued to fall although the drop was very modest. CPI eased from 2.9% to 2.8% in preliminary release for January, but higher than expectation of 2.7%. ECB remains cautious and Lagarde stated that the EU is on a disinflationary trend and signaling potential rate cuts.

Thursday, 22 Feb, 15:30 – US Initial Jobless Claims

US initial jobless claims dropped to a one-month low of 212,000 from the previous week 220,000, suggesting minimal layoffs despite significant job cuts by large businesses, as per the latest Labor Department data released on February 15. Despite notable layoffs, the data indicates a robust labor market, and there are expectations of a Federal Reserve interest rate cut later in the year, contributing to anticipated improvements in the job market.

Thursday, 22 Feb, 16.45 – S&P Global Services PMI

The U.S. service sector marked its 12th consecutive month of expansion in January, with the PMI reading of 52.5, slightly below the forecasted 52.9. While there was robust new business growth, service providers opted for competitive pricing, resulting in the slowest inflation rate since June 2020. Despite that, new business and future activity are likely to expand further following a notable increase in new export orders across the globe according to the latest S&P survey.

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