Three kings from the East come this Friday to give gifts to those who have behaved well during 2022. If Jerome Powell wrote a letter to their Majesties, surely this calls for moderating inflation And allow him to stop being the Grinch who raises interest rates every time he touches it.
However, good old Powell will have to wait until next Friday for his special gift, in the form of last year’s latest inflation data. Notably, Jerome Powell will be content to comply with analysts’ forecasts, which go ahead Price hike of 6.7% Compared to December last year and 0.1% compared to November. The data seems high and more coal than a gift, but it should be remembered that in November prices had risen by 7.1%, 4 tenths more.
Of course, anything below these numbers will be celebrated at the Federal Reserve offices, which, remember, won’t make an interest rate decision until early February. This inflation figure, which is expected to be The underlying fell slightly to 5.9%, it will be the last one before the mentioned meeting and hence, will be the last clue to be able to guess the road map of the Federal Reserve. At the last meeting, and as revealed in the minutes published in recent days, the position was still very conservative. Which is to say that there were no representatives on the committee who pointed to a reduction in interest rates before 2024, with the price of money ranging between 5 and 5.25%. However, market operations say no and what investors are buying is only two more increases of 25 points each in the next two meetings and a decrease of the same magnitude in the last meeting of the year with which they will close 2023. At 4.75%, only 25 points above the current level.
“It can be concluded from these minutes that the agency has not yet ended the fight against inflation, however, its monetary policy Will be determined by the development of labor market data and inflation, although financial conditions will also play an important role”, he points out to Federated Harms. “However, data can change quickly and the Fed will resort to flexibility, optionality and a meeting-by-meeting approach, a new central mantra. For the banks,” he says.
other data of interest
No big data this Friday except December’s inflation data macro Which can beat CPI in the coming days. Data will be known without leaving the US IEA oil listAt a critical moment for the commodity, which has been showing great weakness in recent weeks. actually, barrel of Brent It is trading below $80 despite the fact that OPEC has already cut production.
In the euro area, the unemployment rate and economic activity index Data from the past month, both in the monetary sector and in Germany, which also marked the trend for the rest of the member states.
Finally, we must also be mindful of inflation data coming from the east. China and Japan Will publish their price rise index. In this case, these countries are clearly at an advantage compared to the rest of the world, with inflation expected to be 1.8% in China and 3.8% in Japan.
If it were not for the fact that both countries are at a critical moment, these figures would not have much weight globally. China, for its part, lifting covid restrictions, Recovery activity, trying to contain and regulate the problem with the real estate sector while the Bank of Japan reversed its policy.