Daily update
Daily update
- The Federal Reserve will publish the minutes of its December meeting—which is when Fed Chair Powell had a Damascene conversion to dovishness, and fueled a rally across asset classes. The Fed minutes were written and agreed after that, and the nuance may reflect other Fed members’ concerns with the dovish flip-flop.
- The minutes matter because it is policy perceptions rather than economic trends that are changing at the moment. Recent data flow remains consistent with a softish landing and slowing inflation. Even the surprises are generally not that surprising. Re-evaluating the speed and timing of monetary easing has market rather than economic consequences.
- The US is also offering a business sentiment poll, which does not really say much that is useful, and the JOLTS data on job vacancies. This number is based on so few responses that its accuracy can be questioned. It also reflects churn in the labor market rather than the degree of labor market tightness.
- UK business leaders are calling for rate cuts. Business leaders are not known for their willingness to call for rate hikes, so this is not a surprise. China’s PBoC has offered cheap funding to the country’s banks, which might reflect concerns about the reliability of domestic demand.
