EXECUTIVE SUMMARY
- MNI: Fed In Holding Pattern As Inflation To Stay High-Ex-Staff
- US DATA: Poor Retail Sales Bode Ill For Q1 Spending Despite Mitigating Factors
- US DATA: Slightly Softer Than Expected Import Prices In January
- US DATA: Industrial and Mfg Production Slow To React To Improved Sentiment
US TSYS: Yields Pull Back Again With Consumer Growth Story In Question
Treasuries outperformed global counterparts Friday, fully completing a reversal from a midweek selloff.
- A large miss in January retail sales (-0.9% M/M vs 0.7% prior, -0.2% consensus) represented the biggest sequential drop in 22 months, with a similarly weak "control group" figure leading to a 0.5pp downgrade to the Atlanta Fed's GDP nowcast (to 2.3% GDP growth in Q1, i.e. no acceleration from Q4).
- That was enough to see the 10Y Treasury yield drop 7bp in the subsequent half hour, continuing the downtrend seen beginning in the immediate aftermath of Wednesday's hot CPI release. 10Y yields dropped over 21bp from the Wednesday high to Thursday's low, ultimately ending a tumultuous week 1.5bp lower.
- Yields ticked a little higher in afternoon trade Friday but the curve leaned bull steeper on the day, with the belly outperforming: 2-Yr yield is down 4.6bps at 4.261%, 5-Yr is down 5.7bps at 4.3328%, 10-Yr is down 5.1bps at 4.4782%, and 30-Yr is down 3.9bps at 4.6982%.
- In futures: Mar 10-Yr futures (TY) up 9/32 at 109-08 (L: 108-26 / H: 109-15.5).
- Other data (industrial production mixed, import prices soft) had little lasting impact.
- The coming week’s data schedule is relatively light, due in part to Monday’s Presidents Day holiday (SIFMA recommends bond cash close, equities closed), with initial jobless claims, February prelim PMIs, and regional Fed manufacturing surveys among the highlights. Supply includes 20Y Bond and 30Y TIPS auctions.
- We also get plenty of Fed communications including the January meeting minutes, and speaking appearances by both doves (Gov Waller) and hawks (St Louis Pres Musalem).
NEWS
FED (MNI): The Federal Reserve is likely to keep interest rates on hold for the remainder of the year as strong growth and the threat of trade wars keep inflation too high for comfort, former Fed economists told MNI. “We’re in a holding pattern for this year unless something dramatic happens,” Joseph Haslag, a former Dallas Fed economist, told MNI.
EU (MNI BRIEF): European Commission President Ursula von der Leyen will propose the activation of the Escape Clause from the bloc's fiscal rules so member states can increase their defence spending according to their fiscal situations and current levels of defence spending. In a speech at the Munich Security Conference, von der Leyen said that the escape clause would have to be activated in a "controlled and conditional way" and tailored according to the fiscal and defence spending situation of each member state.
CHINA (MNI): China will export about 80-100 million tonnes of steel this year, down from 2024’s 110 million tones, local analysts told MNI, noting U.S. tariffs targeting the commodity will likely have little impact and have already been factored in. “Exports will decline but remain relatively firm given price competitiveness against other major exporters such as India and Japan,” said an analyst at one commodity research firm, who requested anonymity due to the sensitive nature of the matter, noting China faced 33 trade investigations with several countries in 2024, up from 15 cases filed from 2021 to 2023.
OVERNIGHT DATA
US DATA: Poor Retail Sales Bode Ill For Q1 Spending Despite Mitigating Factors
Retail sales dropped sharply in January, with the overall reading -0.9% M/M (0.7% prior, -0.2% consensus) representing the biggest sequential drop in 22 months. The core aggregates didn't fare much better: ex-autos/gas at -0.5% (12-month low, 0.5% prior, +0.3% consensus) and the control group coming in at -0.8% (like headline, a 22-month low, vs 0.8% prior, +0.3% consensus).
- Revisions suggested that this wasn't as weak a report as it seemed at first glance: December readings for headline, ex-autos/gas, and control were each upwardly revised (by 0.3pp, 0.2pp, and 0.1pp, respectively, though unrounded the magnitude of the revisions were even higher than that suggests).
- And the seasonal adjustments have to be considered. Non-seasonally adjusted retail sales fell 16.5% M/M, which is typical given the drop in purchases vs the holiday season (in January 2024, M/M NSA retail sales fell 16.8%).
- On a Y/Y NSA basis, retail sales accelerated for a 2nd consecutive month to 4.8%, an 11-month high, with the control group up 4.5%, a 6-month best. While we would caution against such comparisons, as they are affected by other factors such as trading days in the month, a look at Y/Y on the adjusted data shows 4.2% growth (slowing from 4.4% in Dec) with 3.7% for control (4.4% prior).
- To be sure, the report is not strong, and almost certainly means that Q1 2025 goods PCE growth - which is based on sequential changes - will have to be reconsidered to the downside absent a big reversal to the upside in February and/or revisions.
- The GDP input control group 3M/3M annualized rate of growth fell to a nine-month low 3.2% from 4.6% in December, with a rough proxy for the volume of quarterly growth plummeting to 0.4% from 3.6% prior, marking a 29-month low.
US DATA: Autos Drive Weak Retail Figure, Potential Tariff And Weather Effects?
Further to our earlier note on the January advance retail sales report ("Poor Retail Sales Bode Ill For Q1 Spending Despite Mitigating Factors"), a couple of other considerations in assessing the importance of the weak monthly reading:
- While December's retail sales growth was revised up, this was offset by downside revisions to November's data (headline was 0.8% but that was revised down to 0.7% in this report, with control group whittled down to 0.1% from a previously estimated 0.4%). Indeed the 0.1pp December upward revision was more than offset by the 0.3pp downward revision to November.
- That helps explain why the 3M/3M annualized reading for control group sales, which we use to proxy GDP goods consumption, saw such a sharp drop in Nov/Dec/Jan compared with the Oct/Nov/Dec.
- We had previously estimated 4.2% real growth in December on that quarterly basis but that's been revised down to 3.6% (potentially leading to a downward revision in that category of Q4 GDP), with the January figure down to 0.4%.
- Can retail sales mount a comeback in this quarter? It's happened before, most recently in May-Jun 2023 before revving up later in the summer (control went from 0.7% 3M/3M annualized to 4.4% in the space of 2 months), and we saw it to a less extreme extent in summer of 2024 where control sales levels went from flat to rising 8% 3M/3M. But February would have to see a big bounce.
- Looking at the categories of retail sales, the breadth of the weakness in January is notable (the only categories to see increases were gasoline, miscellaneous and general merchandise stores and, boding slightly better for services consumption, food services/drinking places.
- But it was really two categories that fuelled the drop: motor vehicles/parts at -2.8% M/M subtracted 0.5pp of the total 0.9% M/M drop in retail sales, with non-store (ie e-commerce) retailers down 1.9%, dragging 0.3pp. Indeed non-store retailers were the only category negative on a Y/Y basis (-1.4%) - all other categories were positive.
- Overall it could be indicative of poor weather in January (and fires in southern California), albeit that's hard to square with strong restaurant purchases (+0.9% M/M). There is some signal of potential tariff front-running here, with strong performances in December for autos, sporting goods, funiture and building materials reversing sharply in January.
MNI: US JAN IMPORT PRICES +0.3%
- MNI: US JAN IMPORT PRICES +0.3%
- US JAN EXPORT PRICES +1.3%; NON-AG +1.5%; AGRICULTURE -0.2%
US DATA: Slightly Softer Than Expected Import Prices In January
- Import price inflation was a little softer than expected in January at 0.3% M/M (nsa, cons 0.4) but with the miss offset by an upward revised 0.2% (initial 0.1%) in Dec.
- Import prices ex petroleum however only saw a small miss, with 0.1% M/M (nsa, cons 0.2) and no offsetting revision to the 0.2% M/M in Dec.
- The ex-petroleum Y/Y rate meanwhile moderated to 1.8% Y/Y from the 2.4% in December which had marked its highest since Dec 2022.
- Within the details, air passenger fares (a series that feeds into core PCE from the international rather than domestic angle) look unlikely to materially alter core PCE estimates. They printed -12.8% M/M, a sharper drop than the -6.2% in Jan 2024 but close to the -12.4% in Jan 2023 and less than the particularly heavy -19.4% in Jan 2022.
US JAN. INDUSTRIAL PRODUCTION RISES 0.5% M/M; EST. +0.3%
US DATA: Industrial and Mfg Production Slow To React To Improved Sentiment
- Industrial production was stronger than expected in January at 0.5% M/M (cons 0.3). Revisions were on balance negative, with an upward revised 1.0% M/M (initial 0.9) in Dec but a downward revised -0.15% M/M (initial 0.2) in Nov.
- However, manufacturing production was more clearly softer than expected at -0.1% M/M (cons 0.1) after a downward revised 0.5% (initial 0.6) in Dec that amounted to a net -0.2pps
- The wedge with overall IP was driven primarily by booming utilities production owing to cold weather, up 7.2% M/M.
- IP sees some recent strength with 1% 3m/3m annualized and 2% Y/Y vs manufacturing at -0.1% 3m/3m and 1.0% Y/Y. However, both have been slow to react to an improvement in manufacturing sentiment and higher orders.
- Capacity utilization on the other hand increased by more than expected to 77.8% (cons 77.7) from a downward revised 77.5% (initial 77.6) for its highest since August.
US OUTLOOK/OPINION: Retail Sales, Inventories Data Weigh On Q1 GDPNow
The Atlanta Fed's GDPNow estimate for Q1 growth has dropped 0.6pp vs the prior day's estimate, to 2.3% Q/Q SAAR after today's data. The soft January retail sales figure captured the most attention, and it dragged down the nowcast for real personal consumption expenditure to 2.3% from 2.8% previously.
- But the weaker business inventories figure (-0.2% Dec vs +0.1% prior, -0.1% expected) and energy investment within the industrial production release (in addition to soft building materials and appliance retail sales) also weighed on the real gross private domestic investment growth forecast, which dropped to 4.9% from 6.2% prior.
- PCE's now seen contributing 1.5pp to GDP (1.9pp prior), with inventories 0.4pp (0.6pp prior) and nonresidential / residential investment seen a little weaker (0.05pp less positive contribution).
- The 2.3% reading is the lowest yet for GDP now and would be equal to Q4's growth rate - a PCE growth figure of 2.3% Q/Q per the nowcast would mark a sharp drop from 4.2% prior and 3.7% in Q3 2024.
MNI: CANADIAN DEC MANUFACTURING SALES +0.3% MOM
- MNI: CANADIAN DEC MANUFACTURING SALES +0.3% MOM
- CANADA DEC FACTORY INVENTORIES -0.0%; INVENTORY-SALES RATIO 1.68
MNI: CANADA DEC WHOLESALE SALES -0.8%; EX-AUTOS -0.6%
- MNI: CANADA DEC WHOLESALE SALES -0.8%; EX-AUTOS -0.6%
- DEC WHOLESALE INVENTORIES +0.7%: STATISTICS CANADA
- CANADA DEC WHOLESALES EX-PETROLEUM/OILSEED/GRAIN -?%
CANADA DATA: Wholesales -0.2% In Dec Led By Machinery
- In Dec. sales ex-petroleum & grains -0.2% MOM, below StatsCan's advance estimate for +0.1% MOM led by machinery and building materials; +0.6% YOY.
- Sales volume -0.8% in Dec.
- Wholesales in 2024 +0.2% to CAD994.5B led by personal and household goods while lower sales in autos partially offset gains.
- In a separate report, Canada manufacturing sales in 2024 -2.1% after three consecutive yearly gains. Decline was led by transportation equipment and petroleum. Autos saw the largest yearly decline last year -11%.
- In Dec. +0.3% MOM below +0.6% flash estimate. The increase was led by petroleum, food and metals. This was partially offset by weaker autos.
- Q4 factory sales +1.6% after four prior declines.
MARKETS SNAPSHOT
Below gives key levels of markets in afternoon NY trade:
- DJIA down 165.35 points (-0.37%) at 44530
- S&P E-Mini Future down 3.5 points (-0.06%) at 6135.5
- Nasdaq up 81.1 points (0.4%) at 20035.81
- US 10-Yr yield is down 5.3 bps at 4.4762%
- US Mar 10-Yr futures (TY) are up 9.5/32 at 109-8.5
- EURUSD up 0.0028 (0.27%) at 1.0494
- USDJPY down 0.53 (-0.35%) at 152.34
- WTI Crude Oil (front-month) down $0.59 (-0.83%) at $70.70
- Gold is down $44.57 (-1.52%) at $2879.86
Prior European bourses closing levels:
- EuroStoxx 50 down 7.1 points (-0.13%) at 5493.4
- FTSE 100 down 32.26 points (-0.37%) at 8732.46
- French CAC 40 up 14.43 points (0.18%) at 8178.54
US TREASURY FUTURES CLOSE
| Futures levels: |
| Mar 2-Yr futures (TU) up 2.75/32 at 102-24 (L: 102-21 / H: 102-25.4) |
| Mar 5-Yr futures (FV) up 7.25/32 at 106-15.75 (L: 106-6.3 / H: 106-19.5) |
| Mar 10-Yr futures (TY) up 10/32 at 109-09 (L: 108-26 / H: 109-15.5) |
| Mar 30-Yr futures (US) up 14/32 at 115-14 (L: 114-19 / H: 115-30) |
| Mar Ultra futures (WN) up 15/32 at 120-19 (L: 119-19 / H: 121-10) |
US 10YR FUTURE TECHS: (H5) Clears Back Above 50-day EMA
- RES 4: 110-25 High Dec 12
- RES 3: 110-19 76.4% retracement of the Dec 6 - Jan 13 bear leg
- RES 2: 110-14 High Dec 14
- RES 1: 110-00 High Feb 7 and the bull trigger
- PRICE: 109-14 @ 16:59 GMT Feb 14
- SUP 1: 108-00 Low Jan 16
- SUP 2: 107-06 Low Jan 13 and the bear trigger
- SUP 3: 107-04 Low Apr 25 ‘24 and a key support
- SUP 4: 106-11 2.00 proj of the Oct 1 - 14 - 16 price swing
Treasury futures have recovered from Wednesday's low, rising back above the 50-day EMA in the process. Recent weakness resulted in a break of 108-20+, the Feb 4 low. The breach highlights a stronger reversal and most likely the end of the corrective cycle between Jan 13 - Feb 7. A continuation lower would open 108-00, the Jan 16 low, and expose 107-06, the Jan 13 low and bear trigger. Key resistance and the bull trigger is 110-00, Feb 7 high.
STIR: Implied Fed Cuts Complete Post-CPI Comeback On Retail Sales
The futures-implied Fed funds rate path took a dovish turn Friday with a weak January retail sales report that cast doubt on the strength of the US consumer going into 2025 (Atlanta Fed's GDPNow fell sharply to 2.3% from 2.8% prior).
- The first 25bp rate cut is fully priced by September, vs October at the end of Thursday's session. Friday saw 8bp added to the 2025 rate cut path.
- For the week, there's been an uptick in cumulative 2025 cuts (41bp vs 36bp at the end of last week) - and that's despite the well-above-expected CPI readings Wednesday (which saw implied cuts reach a low of 26bp).
- See table below.
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Prior Session (Feb 13) | Chg Since Then (bp) | End of Last Week (Feb 07) |
| Mar 19 2025 | 4.32 | -0.6 | -0.6 | 4.32 | 0.0 | 4.30 |
| May 07 2025 | 4.28 | -5.3 | -4.7 | 4.29 | -1.3 | 4.26 |
| Jun 18 2025 | 4.18 | -15.2 | -9.9 | 4.22 | -3.9 | 4.18 |
| Jul 30 2025 | 4.13 | -20.2 | -5.0 | 4.18 | -5.0 | 4.13 |
| Sep 17 2025 | 4.04 | -29.5 | -9.3 | 4.10 | -6.2 | 4.07 |
| Oct 29 2025 | 3.99 | -34.3 | -4.8 | 4.06 | -7.1 | 4.02 |
| Dec 10 2025 | 3.92 | -40.7 | -6.4 | 4.00 | -7.6 | 3.97 |
SOFR FIXES AND PRIOR SESSION REFERENCE RATES
US TSYS/OVERNIGHT REPO: Secured Rates Tick Higher, Could Rise Slightly Further
Secured financing rates ticked up slightly Thursday, with SOFR, BGCR, and TGCR each rising 1bp. Effective Fed Funds were once again unchanged at 4.33%.
- Outside of the year/quarter end in December and the month-end in January, SOFR has largely traded in line or lower than effective Fed funds since the Federal Reserve adjusted ON RRP rates in mid-December (to 4.25% from 4.55%, 5bp more than the 25bp Fed funds rate cut).
- Secured rates could tick a little higher (the 4.32% on Wednesday was a 15-session low) in the coming days though, particularly given settlements from the quarter's Treasury refunding auctions on Tuesday, though the usual cash inflows to market from GSEs next week should mitigate upside rate pressure.
- Month-end will be a bigger test due to the usual factors, plus extremely large coupon Treasury settlements.
REPO REFERENCE RATES (rate, change from prev. day, volume):
* Secured Overnight Financing Rate (SOFR): 4.33%, 0.01%, $2329B
* Broad General Collateral Rate (BGCR): 4.32%, 0.01%, $930B
* Tri-Party General Collateral Rate (TGCR): 4.32%, 0.01%, $907B
New York Fed EFFR for prior session (rate, chg from prev day):
* Daily Effective Fed Funds Rate: 4.33%, no change, volume: $94B
* Daily Overnight Bank Funding Rate: 4.33%, no change, volume: $273B
US TSYS/OVERNIGHT REPO: ON RRP Takeup Hits Fresh 3+ Year Low
Takeup of the Fed's overnight reverse repo facility fell $9B to a fresh post-April 2021 low of $58.8B Friday (vs $2.3T at the 2023 peak).
- Usage of the facility has dropped $40.9B since Monday.
- As we noted Thursday following the Fed's weekly H.4.1 release, while takeup of the overnight reverse repo facility - an auxiliary supply of bank reserves - continues to peter out, there appears to still be little to no urgency among Fed officials to slow or stop balance sheet runoff given that reserves remain elevated ($3.26T in the latest weekly data, around levels we saw as far back as mid-2022).
- The Treasury drawing down its cash at the Fed amid debt limit restrictions should also be contributory to reserve balances over the coming months.
SOFR FIX - Source BBG/CME
- 1M 4.31365 0.00179
- 3M 4.32299 +0.00001
- 6M 4.31099 -0.00402
- 12M 4.27487 -0.01666
BONDS: EGBs-GILTS CASH CLOSE: Week Ends On A Bear Flattening Note
European curves bear flattened Friday.
- An early rise in yields linked to prospects of a less-onerous-than-expected US reciprocal tariff regime (announced late Thursday) was sharply pared in early afternoon.
- US data once again drove the afternoon move as January US retail sales came in much weaker than expected.
- Bund and Gilt yields would fall to session lows around a half hour after that release, but edged slightly higher going into the weekend to finish near the middle of the session's range.
- ECB cut pricing was pared by around 4bp for 2025 as a whole (to 78bp), with BOE flat (57bp).
- After initially tightening, periphery EGB spreads widened steadily through the session.
- Core curves bear flattened slightly for the week as a whole, with Gilts outperforming: 10Y Gilt yields closed the week 2.4bp higher, with 2Y up 3.2bp; 10Y Bund yields were up 5.9bp, with 2Y up 6.5bp.
- Next week's calendar includes flash February PMIs and UK inflation and labour market data.
Closing Yields / 10-Yr EGB Spreads To Germany:
- Germany: The 2-Yr yield is up 2.5bps at 2.113%, 5-Yr is up 1.8bps at 2.225%, 10-Yr is up 1.3bps at 2.431%, and 30-Yr is up 0.4bps at 2.676%.
- UK: The 2-Yr yield is up 2.1bps at 4.2%, 5-Yr is up 1.5bps at 4.211%, 10-Yr is up 1bps at 4.5%, and 30-Yr is up 1bps at 5.086%.
- Italian BTP spread up 1.9bps at 109.1bps / Spanish bond spread up 1.6bps at 62.9bps
FOREX: USD Index at 2-Month Lows, Technical Backdrop Deteriorating
- The surprisingly weak US retail sales report, with revisions not coming close to offsetting the January miss, has prompted a dovish reaction in US rates on Friday. This dynamic has further weighed on an already struggling USD index, which has printed a fresh 2-month low today at 106.57.
- Equity markets remain elevated, clinging on to renewed optimism surrounding Russia/Ukraine, which has helped higher beta currencies to outperform in G10. NZDUSD has extended intra-day gains to 1%, while AUDUSD has breached the 0.6350 mark, rising 0.65% on Friday.
- EURUSD has also made a notable advance above 1.0500, briefly reaching a 1.0514 session peak. Price action today has affirmed the short-term bullish technical theme.
- This week’s rally also strengthens a short-term reversal signal on Feb 3 - a hammer - and suggests scope for an extension near-term. The next important chart point is 1.0533, the Jan 27 high and reversal trigger. Above here, the market’s attention will turn to 1.0630, the Dec 6 high.
- Sterling continues to trade with a resilient bid tone, allowing GBPUSD to consolidate its position back above 1.2600 as we approach the close. Gains on the week now total 1.66%. The pair has breached resistance at 1.2550, the Feb 5 high, signalling scope for a move towards 1.2667, the Dec 19 high.
- Worth noting it is US Presidents' Day on Monday so likely the market focus will turn to Tuesday’s RBA meeting and UK labour market report.
DATA/EVENTS CALENDAR
| Date | GMT/Local | Impact | Country | Event |
| 17/02/2025 | 2350/0850 | *** |  JP | GDP |
| 17/02/2025 | - |  AU | Reserve Bank of Australia Meeting | |
| 17/02/2025 | 0700/0800 | ** |  SE | Unemployment |
| 17/02/2025 | 0800/0900 |  CH | Flash GDP | |
| 17/02/2025 | 1000/1100 | * |  EU | Trade Balance |
| 17/02/2025 | - | EU | ECB's Lagarde and Cipolllone in Eurogroup meeting | |
| 17/02/2025 | 1315/0815 | ** |  CA | CMHC Housing Starts |
| 17/02/2025 | 1330/0830 | * | CA | International Canadian Transaction in Securities |
| 17/02/2025 | 1430/0930 |  US | Philadelphia Fed's Pat Harker | |
| 17/02/2025 | 1520/1020 | US | Fed Governor Michelle Bowman | |
| 17/02/2025 | 2300/1800 | US | Fed Governor Christopher Waller | |
| 18/02/2025 | 0330/1430 | *** | AU | RBA Rate Decision |
| 18/02/2025 | 0700/0700 | *** |  GB | Labour Market Survey |
| 18/02/2025 | 0700/0800 | *** | SE | Inflation Report |
| 18/02/2025 | 0745/0845 | *** |  FR | HICP (f) |
| 18/02/2025 | 0930/0930 | GB | BOE's Bailey fireside chat on open financial markets | |
| 18/02/2025 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 18/02/2025 | 1000/1100 | *** |  DE | ZEW Current Expectations Index |
| 18/02/2025 | - | EU | ECB's De Guindos in ECOFIN meeting | |
| 18/02/2025 | 1330/0830 | *** | CA | CPI |
| 18/02/2025 | 1330/0830 | ** | US | Empire State Manufacturing Survey |
| 18/02/2025 | 1400/0900 | * | CA | CREA Existing Home Sales |
| 18/02/2025 | 1400/1500 | EU | ECB's Cipollone in MNI Connect conference on Balance Sheet | |
| 18/02/2025 | 1500/1000 | ** | US | NAHB Home Builder Index |
| 18/02/2025 | 1520/1020 | US | San Francisco Fed's Mary Daly | |
| 18/02/2025 | 1630/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 18/02/2025 | 1630/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 18/02/2025 | 1800/1300 | ** | US | US Treasury Auction Result for 52 Week Bill |
| 18/02/2025 | 1800/1300 | US | Fed Governor Michael Barr | |
| 18/02/2025 | 2100/1600 | ** | US | TICS |
| 19/02/2025 | 2350/0850 | ** | JP | Trade |
| 19/02/2025 | 2350/0850 | * | JP | Machinery orders |
| 19/02/2025 | - |  NZ | Reserve Bank of New Zealand Meeting | |
| 19/02/2025 | 0001/0001 | * | GB | Brightmine pay deals for whole economy |
| 19/02/2025 | 0030/1130 | *** | AU | Quarterly wage price index |
| 19/02/2025 | 0100/1400 | *** | NZ | RBNZ official cash rate decision |