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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.
EXECUTIVE SUMMARY
- CPI inflation was for once in line with expectations in December as core CPI accelerated only modestly on the month across major components, although with some potentially more constructive details.
- Some uncertainty over implications for core PCE (Jan 27), with a better understanding after PPI (Jan 18).
- The market sees a downshift to a 25bp hike on Feb 1 as locked in, consistent with most of the 20 analysts reviewed below, with a terminal ~4.9% before 50bps of cuts to year-end and deeper cuts into 2024.
- The perceived February downshift has been helped by FOMC commentary calling for a steadier path to higher rates in order to give flexibility going ahead. That flexibility could in turn open the door to pausing after March (getting closer to being priced) if inflation data continues to moderate.
- Core PCE, inflation expectations and notably the ECI for Q4 (Jan 31) are still to come. They would likely have to be particularly strong to see renewed expectations of a 50bp hike but along with changes in financial conditions will determine the degree of Feb 1 FOMC hawkishness.
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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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