The Fed has clearly indicated there will be no monetary expansion this year. While assets such as SPX and gold remain strong, negativity is increasing in cryptocurrencies. Concerns over inflation as the target drifts away, combined with Trump’s tariffs, have pushed predictions for the first interest rate cut of the year to July. Here is what you need to know before the inflation report arrives in a few hours.
U.S. Inflation Report
The U.S. inflation report for January will be released tomorrow. Amid worries that the Fed will miss its inflation target, investors are anxious. Experts expect that inflation will not significantly change compared to December. However, there is hope that the upcoming data will signal the Fed’s potential to begin cutting interest rates again.
Bank of America economist Stephen Juneau has expressed concerns that the risks surrounding inflation are skewed to the upside. Indeed, recent statements from Fed members align with this sentiment.
“Inflation is above the target, risks are to the upside, economic activity is strong, and the labor market seems stable around full employment. If our January CPI forecast comes true, the Fed’s pause will be further solidified,” he stated.
