Highlights
The US consumer price index report at 8:30 am ET will be the focus Wednesday. Headline and core CPI are both expected up 0.3 percent on the month for January, not a pretty picture for an inflation-weary market. Food and energy prices have been rising, along with vehicles and shelter, the usual suspects. Some forecasters even see a 0.4 percent rise for total CPI on the month. The consensus looks for total CPI up 2.9 percent and core up 3.1 percent on year.
After the CPI, a second day of Fed Chair Jerome Powell's testimony on Capitol Hill is set for 10 am ET Wednesday before the House Financial Services Committee. Hopefully, one of the House committee members will ask for the chair's reaction to the CPI report.
Powell's appearance Wednesday follows Tuesday's on the Senate side where, as expected, the Fed chair repeated his recent line that policy is good where it is. After 100 basis points of rate cuts from September through December, policy is"significantly less restrictive," so the Fed does"not need to be in a hurry to adjust our policy stance," Powell said. The chair repeated that he and his colleagues see the neutral funds rate as higher than before the pandemic, which suggests current policy is not a restrictive as they thought it was. Markets in turn marked down expectations for rate cuts further on Tuesday.
Investors remain highly watchful for more Trump tariff announcements and for promised retaliation from the European Union in particular against the president's latest tariffs, the 25 percent charges imposed on steel and aluminum imports. Lots of buzz in markets about the chilling effect for consumers and business of uncertainty around DOGE, immigration and tariffs. That is increasingly at odds with the initial ebullient market reaction to Trump 2.0.
After the CPI, a second day of Fed Chair Jerome Powell's testimony on Capitol Hill is set for 10 am ET Wednesday before the House Financial Services Committee. Hopefully, one of the House committee members will ask for the chair's reaction to the CPI report.
Powell's appearance Wednesday follows Tuesday's on the Senate side where, as expected, the Fed chair repeated his recent line that policy is good where it is. After 100 basis points of rate cuts from September through December, policy is"significantly less restrictive," so the Fed does"not need to be in a hurry to adjust our policy stance," Powell said. The chair repeated that he and his colleagues see the neutral funds rate as higher than before the pandemic, which suggests current policy is not a restrictive as they thought it was. Markets in turn marked down expectations for rate cuts further on Tuesday.
Investors remain highly watchful for more Trump tariff announcements and for promised retaliation from the European Union in particular against the president's latest tariffs, the 25 percent charges imposed on steel and aluminum imports. Lots of buzz in markets about the chilling effect for consumers and business of uncertainty around DOGE, immigration and tariffs. That is increasingly at odds with the initial ebullient market reaction to Trump 2.0.
Definition
Market Focus details key factors in the coming day that will impact the economic outlook and the financial markets. These include central bank events, economic indicators, policymaker speeches as well as expected political and corporate developments.
Description
Keeping up-to-date with event schedules and the economic calendar is key to understanding the global financial system. Econoday's Market Focus allows investors and policymakers to carefully track what will be making news and moving the financial markets in the coming day.
