sasirin pamai
Deutsche Bank Research’s Early Morning Reid Macro Strategy suggests that analysts’ expectations of the Consumer Price Index (CPI) are slightly better than consensus estimates.
The New York Fed’s inflation expectation report indicates a decline in the three-year inflation expectations to 2.35%, down from 2.62%. This marks the lowest level since 2013, while the one-year inflation expectations remained largely unchanged at 3%.
Gas prices experienced a decrease of almost 2.5% in January compared to December. Deutsche Bank Research’s U.S. economists anticipate a 0.15% increase in headline CPI (compared to a consensus of 0.2%), and a 0.27% increase in core CPI (versus a consensus of 0.3%). Analyst Jim Reid notes, “This would see core year-over-year CPI falling two-tenths to 3.7%, and headline down by four-tenths to 2.9%, both in line with consensus.”
Fed Governor Michelle Bowman cautioned that it is premature to project the timing and extent of potential Fed rate cuts, as several risks persist in the Fed’s inflation fight. Richmond Fed President Tom Barkin echoed this sentiment, emphasizing the ongoing risk of sustained inflationary pressure.
Market expectations of Fed rate changes reveal that 91.5% of observers anticipate no adjustments in rates for March. Reid observed, “Expectations of Fed rate cuts saw little change, with slightly less than one in five chance priced in that the Fed cuts by 25 basis points at the March meeting, and an unchanged 112 basis points of cuts priced by December.”
Treasury yields (NASDAQ:TLT) exhibited a flat trend for the day, with the 10-year (US10Y) yield increasing by 0.4 basis points and the two-year yield (US2Y) declining by 0.6 basis points.
