Just now, a blockbuster data has landed.
At 21:30 on the evening of February 9 (Friday), Beijing time, the U.S. Bureau of Labor Statistics released a seasonally adjusted revised value for monthly inflation, which showed that the revised annualized increase in the core CPI in the fourth quarter of 2023 remained at 33% unchanged; The month-on-month increase in the US CPI in December increased from 03% revised down to 02%。This result was broadly in line with market expectations. Previously, analysts estimated that the CPI revision would not fluctuate drastically and would hardly affect the Fed's monetary policy outlook.
On the eve of the release of this CPI revision, the Fed was very nervous. The latest revised data undoubtedly made the Fed breathe a sigh of relief.
After this data, the yield on the US 10-year Treasury note fell and is now at 4146%；Spot *** rose $10 to $2,035 an ounce.
The three major U.S. stock indexes **slightly**, and the Dow rose 0.**28%, and the S&P 500** rose 034%, the Nasdaq index** rose 037%。
It should be noted that the U.S. Bureau of Labor Statistics regularly adjusts monthly CPI data to remove seasonal interference from the data, such as those related to holiday shopping. By smoothing out these factors with seasonal adjustments, it is possible to make meaningful comparisons of inflation in different months of the same year.
Usually the annual revision of the CPI index does not attract special attention. However, the data was revised sharply upwards last year, which shocked the market and triggered sharp market volatility for a time, and market funds doubted the progress of inflation cooling.
The latest revised data was "lackluster", which relieved the Fed and is looking for more evidence that the pressure is continuing to subside before it starts to cut rates.
On the eve of the release of the revised CPI data, the Fed was very nervous. Fed Chair Jerome Powell almost never stressed that he expects a specific economic data, but he said at a recent FOMC meeting that he would be closely watching the CPI inflation revision.
Powell said that a year ago, when inflation looked like it was coming down quickly, a revision of seasonality had changed the trend. In mid-February, the January CPI report and the annual CPI revisions for 2023 will be received, which could change the inflation situation. It is hoped that the revised value will confirm the progress of the inflation pullback, and that the policy is based on data rather than hope.
In addition, Fed Governor Christopher Waller also mentioned the importance of CPI revisions in a speech in January.
Therefore, the global financial market pays close attention to the correction of the CPI in case the inflation outlook changes, thereby affecting the expectation of interest rate cuts, which is currently the most important factor affecting the ** and bond market.
Recently, the Federal Reserve has "collectively released hawkishness" and intends to cool down the market's expectations of interest rate cuts.
Among them, Loretta Mester of the Federal Reserve said that the Fed is expected to gain confidence to cut interest rates later this year, and if inflation does not come down, the Fed can maintain its current policy. When the Fed cuts interest rates, it is likely to take a gradual pace.
Mester believes that there is no urgency to cut interest rates and that more data is needed before the rate is decided. It would be a mistake to cut rates too early, still leaning towards three rate cuts in 2024.
Boston Fed President Susan Collins said Wednesday that "for now, policy remains in a good position, and we are carefully assessing the changing data and outlook." I think it might be appropriate to start easing policy constraints later this year. "The strong performance of the labor market and the economy suggests that it will take some time for the economy to cool down and that rate cuts should be gradual when starting to cut rates.
Minneapolis Fed President Neel Kashkari said in an interview that 2-3 rate cuts seemed appropriate, and that the Fed could cut rates "quite slowly" if the job market continues to be strong.
Richmond Fed President Thomas Barkin said he is still not convinced of the view that inflation will continue to make progress, because the deflation so far has come from the decline in goods** and has not yet spilled over into the services and leasing sectors. Like Kashkari, Barkin tends to be in the "hawkish" camp among Fed policymakers.
*:*Times Brokerage China Author: Zhou Le.
Review: Tan Lugang.