Fed

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

The USD pulled back yet mostly held on to its post-NFP gains in anticipation of a hawkish speech from Jerome Powell this evening.

Will this finally be the reading that shows signals the tight labor market is easing?

Whilst the Fed effectively confirmed two more 25bp hikes to are to follow, Fed fund futures remain unconvinced and are pricing in a single hike to take rates to 5%.

Fed Funds futures traders are pricing in a full 50bps of interest rate cuts by the end of the year!

Stocks are heading southwards after Snap, a usual canary in the coal mine, posts the slowest revenue growth since going public in 2017 and as investors await the Fed rate decision.

The conclusion of the FOMC meeting at 19:00 GMT is hands down the main even, so we could be in for a session of tight ranges beforehand (and fireworks after).

The January Consumer Confidence report is a reminder that the US economy is like a rollercoaster ride, full of ups and downs.

Based on the limited figures we have access to, there’s some evidence that the labor market has deteriorated over the last month...

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.

Dollar rebounds as cautious Fed tone on inflation tempers expectations of looser monetary policy

Traders were net-short the 2-year treasure note by a record amount last week. Which means falling yields are likely driven by short-covering by bears with sore heads.

Traders are split 50/50 between expecting another 75bps rate hike and a downshift to 50bps, so we’re likely to see some market volatility regardless of how this month’s jobs report prints.

Fed Chairman Powell hinted at a slower pace of rate hikes, but the key question is whether the peak rate will be above or below 5%...

The terminal rate is going to be as an important consideration for the markets as the decision to potentially downshift in December.

What could possibly go wrong? Well, if we remember that complacency is the devil, perhaps volatility is set to explode higher.

The stakes couldn’t be higher for this month’s FOMC meeting - see why!