Boston Fed President Susan Collins said, “I believe it will likely become appropriate to begin easing policy later this year.” She added, “When this happens, a methodical, forward-looking approach to reducing rates gradually should provide the necessary flexibility to manage risks while promoting stable prices and maximum employment.”
New York Fed President John Williams stated, “While the economy has come a long way toward achieving better balance and reaching our 2% inflation goal, we are not there yet.” Williams added that he would need to assess “the data, the economic outlook and the risks, in evaluating the appropriate path for monetary policy that best achieves our goals.”
On Tuesday, Federal Reserve Governor Michelle Bowman said she’s in no rush to cut rates, given upside risks to inflation that could stall progress or cause a resurgence in price pressure.
Bowman said that inflation would decline “slowly,” adding that she will remain “cautious in my approach to considering future changes in the stance of policy.”
The Gross Domestic Product (GDP) for the final quarter of 2023 was reported at 3.2% YoY, slightly below the preliminary estimate of 3.3%.
US Retail Sales Inventories rose 0.3% MoM in January, below 0.4% in the previous month's data, while Wholesale Inventories declined -0.1% MoM, missing estimates of 0.1%.
Previous data releases in the week:
US Durable Goods Orders dropped -6.1% MoM, more than the -4.5% contraction expected and the -0.3% dip observed in December.
The S&P/Case Shiller Home Price Index for December rose 6.1% YoY, outpacing estimates of 6% and November’s 5.4% reading.
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 US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, edges up at 103.95 as uncertainty over US economic data has improved the appeal for safe-haven assets.
The US 10-year Treasury note yield stands at 4.284%, down two basis points (bps).
Interest rate speculators have priced out a Fed rate cut in March and May. For June, the odds of a 25 basis point rate cut are at 49.7%.
Investors are pricing in 85 basis points of easing throughout 2024.
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