Data-wise, US New Home Sales rose by 1.5% from 0.651M to 0.661M, less than the 0.68M expected.
The Dallas Fed Manufacturing Index for February contracted -11.3 though it improved compared to January’s -27.4 shrinkage, suggesting that business activity is recovering.
The January minutes from the Federal Open Market Committee (FOMC) reveal that policymakers are cautious about reducing interest rates, mainly due to a recent uptick in inflation measures. While recognizing that the risks associated with meeting their dual mandates of price stability and maximum employment are becoming more balanced, the Fed intends to stay "highly attentive" to inflation. This focus comes even as they acknowledge that economic risks are skewed toward a downturn.
Besides that, the US labor market remains strong after the latest Initial Jobless Claims data saw fewer Americans applying for unemployment benefits.
US business activity moderated in February, revealed S&P Global. The Services and Composite Indices expanded below the previous month’s reading, though Manufacturing surprisingly jumped, exiting contractionary territory.
Investors are pricing in 85 basis points of easing throughout 2024.
The US Dollar Index, tracking the performance of the US Dollar against a basket of six major currencies, is currently trading near 103.84, down 0.12%.
New York Fed President John Williams said the Fed is on track to cut interest rates “later this year.” He noted that the progress of inflation toward the central bank's 2% target would be “bumpy,” but overall the economy is headed “in the right direction.”
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