The US stock exchanges were closed as the US had a national day of mourning for former Pres. Carter.
Apart from the Challenger layoffs - which were less than expecations - there was no other economic data.
There was some Fed speak from Fed's Harker, Collins, Schmid and Bowman:
- Fed's Harker: Fed's Harker stated that the FOMC remains on a rate-cutting path, with future decisions driven by data. He noted that labor markets have stabilized and are now in a better place, with the pace of job creation normalizing. The Fed has seen success in bringing inflation down from its peak, but Harker emphasized the appropriateness of taking a pause amid ongoing economic uncertainty. His comments reflected a less hawkish tone, suggesting that the Fed can hold its current stance for a while and allow the data to guide future policy moves.
- Fed's Collins: Fed's Collins, a 2025 FOMC voter, emphasized the importance of a gradual and patient approach to rate cuts, aligning with the Fed's December forecasts. She noted that the December rate cut, while a close decision, provided insurance for the labor market. Collins highlighted that the economy remains in a good place overall, though uncertainties persist, including the potential impact of the upcoming election. Inflation is expected to remain higher than in the recent past, with housing factors continuing to be a major driver, while the labor market is less of a concern. She acknowledged progress toward a 2% inflation target but described the trajectory as gradual and uneven, with the Fed maintaining a flexible, well-positioned policy stance.
- Fed's Schmid: KC Fed President Jeff Schmid emphasized that any further rate cuts should be gradual and data-driven. He suggested that interest rate policy may be "near" its long-term target, with the Fed "pretty close" to achieving both its mandates. Schmid noted that inflation is moving toward the target, economic growth is showing momentum, and while the job market is weaker, it remains healthy. He expressed optimism about growth, hiring prospects, and the continued easing of inflation pressures. However, he cautioned that reaching 2% inflation is unlikely until 2026, with the final stage of achieving this target expected to be the most challenging.
- Fed's Bowman: Fed Governor Bowman, speaking in Laguna Beach, California, reflected on 2024's monetary policy, economic performance, and lessons for banking regulation. She described the December rate cut as a "final step" in recalibrating policy but noted she could have supported no action, citing stalled progress on inflation and the economy's strength. Bowman emphasized a cautious, gradual approach to adjusting policy, expressing concerns that the current stance may not be as restrictive as perceived. She highlighted elevated inflation with upside risks and wage growth outpacing levels consistent with the inflation target, prioritizing inflation risks over the jobs mandate. Bowman urged patience in judging policies of the incoming administration and advocated for a more pragmatic approach in banking regulation.
US debt markets were open until 2 PM before closing for the day:
- 2 year 4.266%, -2.5 basis points
- 5-year 4.456%, -1.1 basis points
- 10 year 4.689%, -0.4 basis points
- 30 year 4.932%, unchanged
IN other markets:
- crude oil rose $0.90 or 1.19% at $74.19
- Gold is trading up $7.90 or 0.32% or 2669.41
- Silver is little changed at $30.10
- Bitcoin is continuing its move to the downside. The price is down $-3200 at $91,806
In the forex market, the USD is mostly higher with modest changes. The USD vs the major currencies shows:
- EUR: +0.16%
- JPY: -0.16%
- GBP +0.40%
- CHF +0.13%
- CAD +0.10%
- AUD +0.29%
- NZD +0.14%
This article was written by Greg Michalowski at
www.forexlive.com.
