Inside Markets — Terminal Rate
A downward revision to Q4 GDP and upward revision to Q4 PCE inflation have investors cautious ahead of tomorrow’s core PCE print for January.
A downward revision to Q4 GDP and upward revision to Q4 PCE inflation have investors cautious ahead of tomorrow’s core PCE print for January.
Ten-year Treasury yields are approaching resistance near 3.90% where we expect mean reversion to kick in and pull yields back.
The no-landing narrative that emerged after the strong January payroll number drives a cyclical recovery theme in equity markets.
The recent resilience of the S&P 500 (SPX) amid the bearish repricing of Fed rate expectations comes from an emerging ‘no landing’ narrative.
As we noted yesterday, we’re discounting the signal quality of the January payroll data given the outsized role of seasonal adjustment factors.
Let’s review potential CPI scenarios as equity markets will take initial direction from headline CPI, due tomorrow.
US equities are mixed with the S&P 500 on track for its worst week of 2023.
Catalysts ahead include Michigan inflation expectations and two Fed speakers tomorrow, but markets remain focused on Tuesday’s CPI report.
Terminal rate expectations drift higher as Fed officials answer questions about last week’s strong Jobs Report.
The focus today is on Fed Chair Powell’s comments at the Economic Club of Washington.