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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
MNI U.S. Weekly Macro Wrap
Executive Summary
- At one point, this week’s macroeconomic data appeared to cement the case for a 25bp Fed rate cut on September 18, versus 50bp expected by several analysts and market participants.
- The August CPI report showed a clearly higher-than-expected core reading of 0.28% M/M, which all but eliminated market-implied probability of a half-point cut, as it was seen to remind FOMC participants that inflation risks (particularly in housing) lingered.
- But developments on Thursday changed the outlook: first, the producer price data confirmed that the Fed’s preferred August PCE gauges would come in softer than their CPI counterparts, albeit perhaps not materially softer than what analysts had pencilled in after CPI.
- More notably, a seemingly coordinated set of newspaper reports Thursday afternoon suggested that a 50bp cut was still possible.
- Atlanta Fed wage tracker data and University of Michigan consumer inflation expectations out Friday also appeared to marginally solidify the case for an outsized cut.
- Markets head into next week with Wednesday’s FOMC decision seen as coin toss between a 25bp and 50bp cut (vs 28bp priced after CPI and PPI). Barring any further steers from media outlets over the weekend, retail sales on day one of the two-day meeting could see the unusual case where it tilts market expectations either way.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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