Powell

The Fed has toned down its statement to give it flexibility to pause the interest rate hiking cycle in May depending on incoming economic data

Gold prices put in a strong bounce last week to create a bullish engulfing pattern. Half-way through the following week and that formation is almost nullified already.

According to the CME’s FedWatch tool, investors are now pricing in a 60/40 shot of a 50bps rate hike in two weeks’ time and that rates could peak above 5.5%.

Market mostly traded in tight ranges ahead of Jerome Powell’s highly anticipated testimony to the House, which has the potential to be a volatile event.

Some officials and Fed watchers have suggested a 50 basis-point move should be on the table if inflation fails to slow...

One sure thing is that Powell is not the uber hawk he once was and there won’t be any surprise 75bps hikes coming down the line.

Futures markets now tally with many Fed policymakers for the first time this year, accepting the Fed's "terminal rate" will be above 5%...

Futures point to a mixed start as investors look ahead to a keenly awaited speech by Fed Chair Powell. Biden's State of the Union address is also due later.

If markets don’t care about what Powell has to say about interest rates, the next place to turn its attention to may be growth and the outlook for a possible recession in 2023!

The Fed Chairman isn’t yet willing to entertain a pause in rate hikes or the prospect of rate cuts in 2023, though he continues to emphasize the central bank’s data dependence...

While there seems to be a clear consensus that the central bank should slow its pace of rate hikes, the ultimate question for this week’s meeting will revolve around the so-called “terminal rate,” or how high the Fed will have to push interest rates next year before pausing the rate hike cycle.

Chances are that Powell and gang stick to the plan and only hike 50bps. However, that’s not to say that they can’t increase rates later if they deem it necessary.

If Core PCE continues to fall over the coming months, the Fed may end up hiking rates less than it expects, or even cutting rates before the end of next year.

This was the unofficial pivot the markets have been waiting for.

Which direction will the Loonie break?

China’s PMI’s may contracted at their fastest pace in 6-months, but hopes of China reopening have remained the focus to support sentiment.

This report will make the case that policymakers should find the wisdom to accept what they cannot change: inflation is not only secular, but it is also the medicine that the global economy needs to escape its debt trap and solve the generational inequalities which tear apart Western countries.