Institution: Inflation slowdown stalls, Federal Reserve may keep interest rates unchanged in Q1

Deep Tide TechFlow News, on January 13, according to Jin10 Data, Forex.com market research director Matt Weller stated that the overall and core CPI in the US for December are both expected to increase by 2.7% year-on-year. Overall, the process of inflation returning to the 2% target has been stalled for over a year, during which the overall CPI year-on-year increase has remained in the 2.3-3% range; meanwhile, the core CPI has also stayed in the mid-to-high range of 2.5-2.9%. Despite inflation remaining above the target level, concerns about the labor market continue to be seen as a more urgent issue for the Federal Reserve, with market expectations that the federal funds rate will be further lowered this year. However, the implied probability of the Fed cutting interest rates again at the March meeting is only about 25%, and the market is confident that the Fed will keep rates unchanged this month. The news that the US Department of Justice summoned Powell this weekend adds additional risks to the Fed’s independence. Although this is a low-probability event, it increases the possibility of Trump removing the Fed Chair early. If this occurs (despite the still low likelihood), regardless of current inflation data, more aggressive rate cuts may be seen.