Stocks are on the slide once again, as fears of prolongued periods of high interest rates cast aside recent optimism on falling inflation. However, todays improved US data does help ease some of the fears that we could be facing a sharp economic collapse this month, says Joshua Mahony. Markets slump, although the dollar struggles to follow through “The bears have re-emerged after a near three-week period of hibernation that allowed the DAX to push an impressive 10% higher. However, US markets appear to have led the drive lower, with the Tuesday declines on the other side of the pond feeding through into Europe yesterday and today. Fortunately for the FTSE 100, we continue to see the declines in GBPUSD provide some protection to the index. However, we are yet to see any major appreciation for the dollar despite this week’s equity losses, with the sharp declines in US inflation signalling the potential for a relatively resilient outlook for the likes of EURUSD and GBPUSD. In the absence of any major resurgence for the dollar, we continue to see strength for the likes of Gold and Silver. ” US data improves, alleviating economic fears somewhat “Improved economic data out of the US has helped highlight a relatively resilient economy despite mixed earnings reports thus far. Unemployment claims dropped to the lowest weekly reading in eight months, easing fears of a sharp uptick in unemployment as recessionary pressures take hold. The typical relationship between economic growth and unemployment looks to be cast aside on this occasion, with the US economy entering this period in an environment where employers had struggled to fill their roles. Meanwhile, the rise in Philly Fed manufacturing survey brings about a five-month high for the economic gauge. Coming off the back of a collapse in the Empire state figure in New York, this does at least allay some fears that the manufacturing PMI will follow suit next week. ”

Stocks continue to consolidate after the recent rebound, as Wall Street continues to debate the outlook for Q4 earnings season and future Fed moves. According to the latest data from FactSet, insiders expect the S&P 500 to report a year-over-year decline in Q4 earnings of -3.9%, which if realized would be the first quarterly loss since Q3 2020. Banks earnings Goldman Sachs and Morgan Stanley capped off big bank earnings yesterday with both taking a hit in their investment banking operations, similar to other Wall Street firms that reported last Friday. Goldman, which reported a whopping -69% decline in profits, was further pressured from the roughly $1 billion that the bank set aside in loan-loss provisions and a nearly $2 billion loss in its consumer banking division. Morgan Stanley saw a similar plunge in investment-banking revenues but did manage to deliver a smaller profit decline (-40%) than analysts had been expecting thanks to a record quarter for its trading desk. While some banks in Q4 fared better than others, bears overall see signs of trouble in the additional +$3 billion that Wall Street banks collectively set aside to cover loans that might go bad amid a potential US recession in 2023. Bulls vs bears Bears believe the economy and corporate profits are at risk from both recession and elevated inflation in 2023 and warn that Wall Street is still underestimating the damage such a double-whammy will inflict. Bulls continue to point to growing signs of decelerating price gains and slower job growth that they believe will pull inflation back toward the Fed's target rate faster than stock bears anticipate. Bulls however are still struggling to justify higher stock prices in the short-term as the Fed's tightening program and elevated inflation look set to continue against a backdrop of weaker consumer and business spending. Investors are also now facing the possibility of a prolonged fight in Washington over the debt ceiling. Treasury Secretary Janet Yellen warned last week that the agency will begin taking “extraordinary measures” after the US reaches its $31.4 trillion debt limit on Thursday. Yellen warned Congress that the debt ceiling will need to be lifted by early June when the Treasury expects to exhaust its cash and the extraordinary measures, though experts say the government can likely make it to August before any type of shutdown. So it's not an immediate crisis but as the deadline approaches, investors will likely start to grow more nervous and see it as yet another unwelcome risk. In conclusion Today, investors will be digesting a slew of economic data, including the Producer Price Index, Retail Sales, Industrial Production, Business, the NAHB Housing Market Index, and the Fed's Beige Book. On the earnings front, Alcoa, Charles Schwab, Discover, JB Hunt, Kinder Morgan.

A second day of losses for the Dow comes as investors watch some worrying weakness in retail sales, says Chris Beauchamp, chief market analyst at online trading platform IG. Stocks turn lower again “Markets are quite happy to see inflation weaken, but the sight of weaker US retail sales is certainly not music to their ears. With earnings season only just hitting its stride, such weakness in economic data bodes poorly for corporate results, at least in coming quarters. In addition, comments from Fed member Bullard suggest that we haven’t quite seen the death of the 50bps rate hike, and that it might be better to err on the side of caution.” Slowing inflation still offers best hope of a rally “Stocks continue to wonder where the next driver of a bounce comes from. For the moment it seems that investors are going to remain fixated on inflation. But with allocations to US stocks at two-decade lows there is the chance of at least a first-half rebound if earnings are overall better than expected. But with the Nasdaq struggling in recent days it seems investors need a lot more convincing.”

Gold price is on a three-day corrective decline as the US Dollar recovery gathers strength. United States Retail Sales and Producer Price Index data eyed for fresh impetus. The USD/JPY upsurge powers the US Dollar, but US Treasury bond yields plunge. Gold price sees downside opening up as the 4H technical setup turns bearish. Gold price is extending its correction from nine-month highs into the third straight day this Wednesday. Gold price is undermined by resurgent United States Dollar (USD) demand, despite the sell-off in the US Treasury bond yields. Investors brace for the critical United States Retail Sales and Producer Price Index (PPI) data slated for release later in the day. United States Retail Sales and Producer Price Index data up next   The United States Dollar is firming up early Wednesday, continuing its recovery momentum from seven-month troughs reached at the start of the week. A sense of caution prevails as investors eagerly await the United States Retail Sales and Producer Price Index (PPI) data for fresh insights on the US Federal Reserve (Fed) future policy course. The US Retail Sales are foreseen at 0.1% MoM in December vs. -0.6% previous, while the Core figure is expected to drop 0.7% MoM in the reported period. Meanwhile, the US Producer Price Index is expected to ease to 6.8% and -0.1% on an annualized and monthly basis, respectively. The US economic data releases will provide further evidence that the Federal Reserve needs to slow down its tightening pace amid growing risks to consumer demand. The CME FedWatch Tool shows a 95% probability of a 25 basis points (bps) February Fed rate hike, followed by another 25 bps in March, which stands at around 78%. Weak United States macro data could check the US Dollar's correction, motivating Gold bulls to fight back for control. However, the sentiment on Wall Street will play a pivotal role, as corporate earnings remain on the agenda, especially after some financial companies' results disappointed on Tuesday. US Dollar rallies with USD/JPY post-Bank of Japan verdict In the meantime, the US Dollar strength will continue to dominate and keep the Gold price on the defensive. The US Dollar follows the massive upsurge seen in the USD/JPY pair after the Japanese yen collapsed on the Bank of Japan's (BoJ) decision to maintain key rates alongside its yield control policy. In doing so, the BoJ defied the market pressure to tweak its yield framework after a few days of the Japanese government bond yields (JGB) topping the 0.50% cap widened by the central bank at its December policy meeting. The BoJ inaction has triggered an explosion in the global bond market, triggering turmoil in the US Treasury bond yields across the curve. The 10-year JGB yields are down 13.5 bps at 0.365%, down 27% on the day. Gold price technical analysis: Four-hour chart After defending the $1,900 mark on Tuesday, Gold buyers have given up control, as the price yields a downside break of a symmetrical triangle on the four-hour chart. Gold price breached the rising trendline support at $1,907 on a four-hourly candlestick closing basis, validating the triangle breakdown. The Relative Strength Index (RSI) has pierced the midline for the downside, suggesting that the tide has turned in favor of bears. Therefore, the downside remains exposed toward the $1,870 previous critical support should the bullish 50- Simple Moving Average (SMA) at $1,890 cave in. On the flip side, recapturing the triangle support-turned-resistance is critical to resuming the recent uptrend. The next key upside target is seen at the mildly bullish 21SMA at $1,911, which coincides with the triangle resistance. Gold price could accelerate toward the $1,920 round figure on a sustained bullish momentum.  

In today's live stream, Coach shared his line in the sand on Cable. He also revised his short term view on Silver with $25.50 being viable.

It might be a day away, but the BoJ still holds sway as markets fret about the BoJ's highly uncomfortable position, which is likely holding global markets hostage. Global shares are trading mixed after a quiet session for overseas markets because Wall Street was closed for a public holiday. China's GDP came in a bit higher than expected but was received by the sound of crickets as traders care less about backward-looking data during China's reopening process. Instead, they are now focusing on-the-spot proof in the economic pudding where retail sales laid an egg. However, on the flip side, China's industrial engines are still revving up in conjunction with the grand reopening as industrial production came ahead of expectations. So, a bit of saw off in most folk's books. Asia markets have become a tad less enthralled after the PBoC failed to lower the MLF rate while reaffirming its pledge to keep policy "targeted and forceful" this year. And with local FX traders expecting growth to drive the next leg lower in USDCNH, they, too, were less enamoured by the lack of a rate cut. In addition, they were less enthusiastic about Chinese consumers keeping their purse strings taught. Bank of Japan Last Thursday and Friday (12th/13th Jan), there was a profound JGB selloff following a local paper Yomiuri Shimbun, which reported that the BoJ would review YCC's side effects at this MPM. The BoJ responded by conducting its most significant single-day YCC purchases, buying JPY 6trn (EUR 43bn) of JGBs over the two days.  Prolonged daily purchases of this scale seem untenable, increasing the risk of an imminent policy change. And this is not even accounting for the Rinban auctions through which they purchased even more bonds. Additionally, when the BoJ widened the 10y JGB yield target band on 20th Dec, one of their explicit goals was to "Encourage a smoother formation of the entire yield curve." However, the 10 point of the JGB curve is still in dire need of damage control. Hence this would also suggest the BoJ is likely dissatisfied with its current policy mix.  The likely outcome of any BoJ tightening is further sales of foreign bonds where EGBs are more exposed than USTs; Treasury/Bund tighteners since over the last 12m have seen Japanese investors liquidate much of their UST holdings in the context of profoundly negative FX  Hedged returns. Japanese market participants made net sales of EUR 122bn of USTs in 2022, compared to EUR 23bn for Bunds/OATs/BTPs/DSLs combined. Therefore, there is room for EGB underperformance.

Outlook: This is a week you can go mad trying to absorb and understand so much data. It seems improbable, but Japan is front and center. Japan reports CPI on Friday, but before then, we get the Bank of Japan updated economic forecasts and any fresh changes to the monetary policy regime on Wednesday. The WSJ reports "The 10-year JGB yield could rise as high as 1% if the BOJ abandons yield curve control this week, according to estimates by Daiwa Securities strategist Eiichiro Tani. But he said the yield would likely decline toward the latter half of 2023 owing to the slowing economy and declines in global interest rates."   Adding to the sense of crisis, Reuters reports there are rumors of a BoJ emergency meeting today "as it struggles to defend its new yield ceiling in the face of massive selling, sending the dollar to a seven-month low."   We say abandoning curve control would be out of character for the BoJ after it modified it only a few weeks ago. Allowing a giant move from 25 bp to 1% in under a month is too wild for any central bank, let alone the staid BoJ. So, abandonment is almost certainly out of the question, but that doesn't mean the market will not be expecting it and testing prices, forcing the bank to buy more bonds. We expect a whole lot of backroom arm twisting. Reuters reports the pressure is already on full-bore. "… speculation is rife [the BoJ] will make changes to its yield curve control (YCC) policy given the market has pushed 10-year yields above its new ceiling of 0.5%. The BOJ bought almost 5 trillion yen ($39.12 billion) of bonds on Friday in its largest daily operation on record, yet 10-year yields still ended the session up at 0.51%. Early on Monday, the bank offered to buy another 1.3 trillion yen of JGBs, but the yield stuck at 0.51%.   "'There is still some possibility that market pressure will force the BOJ to further adjust or exit the YCC,' JPMorgan analysts said in a note. 'We can't ignore this possibility, but at this stage we do not consider it a main scenario.'" In other words, Japan and its central bank would no doubt prefer to appear dignified and in control.   As for the rst of the world, also on Friday are the US PCE price indices, generally far lower than the CPI we just suffered through, but by how much this time? We also get housing prices and starts, consumer confidence, new home sales and durables. Canada reports the biggies–retail sales (Tuesday), CPI (Wednesday), and GDP (Friday). The eurozone reports preliminary consumer confidence tomorrow.   To disrupt the flow of data that is what we are supposed to watch for FX influences, we get a ton of political hoo-ha, including the debt ceiling talk in the US, Biden's classified papers, important Russians criticizing the conduct of the war (and not standing too close to windows), and ongoing worries about Covid in China. So far the one happy note is that the Chinese health service says it hasn't found any scary new variants. Unless there is some weird surprise from left field, sentiment focuses on US inflation falling nicely, allowing the Fed to do 25 bp on Feb 1, not 50 bp, and perhaps starting talk of a soft landing again. On Wednesday we get the Beige Book and also the Atlanta Fed's GDPNow, last at a boomy 4.1% in Q4. This raises the issue of which is more important to FX traders, hawkishness and yields or growth? History tells us traders neglect growth and favor crystal ball readings of central bank intentions. If that's what we have now, the dollar can continue to slide downhill, with the usual pushbacks fairly minor and little sign of profit-taking.   Almost half of our Readers are not in the US, so may not be familiar with the reason for today's holiday honoring Martin Luther King, Jr. He said "I have a dream" of racial equality. Equally quoted is: "The arc of the moral universe is long, but it bends toward justice."   Tidbit: The Economist opines that China's reopening will be the biggest economic event of 2023. Prominent among effects will be Chinese demand for commodities, including oil–and gas. Brent oil can easily go back to $100. Natgas can easily eat into Europe's now-absolute need to buy it before next winter.   Tidbit: On Saturday, the UK announced it will send Ukraine tanks, after France, Germany and the US said they will send armored fighting vehicles, whatever those are. It seems clear that plenty of stuff is needed that is non-military–plumbing supplies, stove and refrigerators to replace those the Russians bombed to smithereens. No information on that side...

Dollar Index has broken below 102 and it would be important to see if the fall would sustain or the index would bounce back in the next 1-2 sessions. That said Euro, Pound, Aussie trade higher and can test 1.09, 1.24 and 0.72 respectively while EURJPY and USDJPY look bearish. USDRUB has risen fairly from 66.35 seen on Friday and can now head towards 70. EURINR can slowly rise while USDINR can remain below 81.50 for some more time. USDCNY too has been strongly bearish and may continue while below 6.70. The US Treasury yields hovers above their crucial supports. A sideways consolidation is possible before we see a fresh rise eventually going forward. The German Yields are hovering above their key supports and can see a fresh leg of upmove from here. The 10Yr and 5Yr GoI have to get a strong follow-through rise from here to avoid a fall back. Dow and DAX remains bullish to see a test of 34800-35000 and 15300-15400 in the near term. Nikkei has come down further towards the key support at 25700. Shanghai has risen above the 3200 resistance zone and has room to move up further from here. Nifty is mixed and range-bound between 17800 and 18000. Brent and WTI are hovering below the crucial resistance at $86 and $80-81 respectively. Gold is near important resistance at 1930-1950. Copper and Silver looks bullish for a test of 4.30 and 25-25.50 respectively in the near term. Visit KSHITIJ official site to download the full analysis

Markets are complete opposites and divided as EUR/USD and DXY. On the EUR side is located Stock indices, all metals to include Gold,  Silver and Copper as the big 3 then Commodities. DXY trades opposite but trades along side the bond price.  The categories break down further to yields,  bonds and interest rates. All market prices trade from the interest rate curve as parity or 1.0000. AUD and NZD are 0 point currencies and trade from parity. JPY and BOJ contain negative interest rates yet trade from parity. All market prices then rise from parity as parity at 1.0000 is the interest rate floor. Only on fleeting instances would a market price trade below parity. This is the central bank design of markets, prices and movements. The current EUR/USD and ECB interest rate floor trades 1.0344 and quite high yet EUR/USD trades 1.0700's or 400 pips above 1.0344. No terrible at all. At the 2008 crash, EUR/USD traded at 1.6000's when the ECB curve traded 1.0500 and 1.0600's or 5400 pips. The eyeball view alone says screaming overbought by light years. The EUR/USD dropped but the interest rate curve had to drop in order for EUR/USD to trade miles lower. The market price is always secondary to the interest rate as the interest rate is the prime mover and dictator. The Fed and DXY curve trades 1.0007 and DXY trades 270 pips above or 101 pips from 102.77. The curve floor in relation to exchange rates informs a range market as market prices are fairly low in relation to floors at 1.00 parity. At parity or an interest rate floor is an average so any change to central bank interest rates barely moves the 1.00 needle as all interest rates move in a symphonic harmony to each other. Daily interest rates change barely 0.02 which does nothing to the overall curve but holds markets to trade in smaller and smaller ranges. If interest rates traded freely as was the case for the past 40 years of market trading then market prices would see wider ranges and much more profit opportunities.  A 25 and 50 point change to interest rates barely experiences a 50 pip move and the cause is the interest rate curves. If markets traded freely, market prices would trade 100's of pips on a central bank change. The laugh to 1.0344 and 1.0007 is EUR/USD as both numbers are the exact same for trade purposes but the eyeball view appears a wide difference. Despite the difference in numbers, FED and ECB curves forecast any market price on the planet. For daily trade purposes for 7 and 24 hour trades, interest rates is the only requirement and Statistics becomes a far distant second. Today's EUR/USD: 1.0704  1.0717 and 1.0731 Vs 1.0764, 1.0771, 1.0778, 1.0785, 1.0798, 1.0805, 1.0812. EUR/USD trades every 6 and 7 pips. Pre 2016, EUR/USD traded every 12 and 14 pips and a giant difference from today's standards. Next week Currency prices remain loccked inside 200 ish pip ranges and trade at highs near vital MA's. AUD/USD for example trades 0.6742 to 0.6963, NZD/USD 0.6228 to 0.6454, EUR/CAD 1.4253 to 1.4476, 1.4487, 1.4493. EUR/JPY requires break at 141.68 to target lower while CAD/JPY trades fairly normal at 97.91. Short below and long above becomes the only CAD/JPY strategy. GBP/JPY trades from 156.18 to 162.14. At 159.85 trades fairly normal and the same situation as CAD/JPY. GBP/JPY for next week, we're  long below 159.86 and short at 160.99. EUR/USD trades 1.0457 to 1.0847 or 400 pips and a 33 pip drop to ranges since last week. EUR/USD vital points are located every 50 pips from 1.0457 as 1.0507, 1.0557, 1.0607, 1.0657, 1.0707, 1.0757, 1.0807, 1.0657. GBP/USD trades the same range from 1.1966, 1.2010 to 1.2534. Shorts next week are located from low 1.2200's. USD/JPY remains locked inside 125.00's to 135.00's. Shorts next week at 133.98 targets 132.00's and 131.00's. EUR/NZD broke above 1.6905 and traded to 1.6974. Remember January range 1.6267 – 1.7075. Gold vital: 1877.29 and 1846.57. Gold at 1889.00's trades at the highs alongside EUR/USD. Gold and EUR/USD offers double trades. Overall trade next week, well see more of the same 200 pip ranges. 

A volatile week awaits FX traders, featuring the first Bank of Japan decision of the year. It’s a close call whether policymakers will adjust their yield strategy once again, although even if they don’t, it’s probably only a matter of time. There’s also a deluge of data releases from the major economies. 

Daily Currency Update The Australian dollar is stronger this morning when valued against the Greenback. The Australian Dollar hit a fresh six-month high against the US Dollar on Friday, albeit Thursday’s US data showed that inflation continued to grind lower. Therefore, the AUD/USD pair is trading at 0.6973 at the time of typing. Better-than-expected Consumer Price Index (CPI) reading last week augmented speculations for further tightening by the Reserve Bank of Australia (RBA), bolstering the AUD/USD to fresh multi-month highs. However, the futures market shifted on the release of US CPI data as traders expect rates to peak at around 3.73%, from 4% last week. Another factor that underpinned the AUD was China’s easing restrictions on coal imports. The increasing need to secure energy supplies after easing COVID-19 restrictions has pushed China to gradually resume Australian coal imports and urge domestic miners to boost their already record out. The lifting of the unofficial ban on Australian coal imports, which were halted in 2020 in a fit of Chinese pique over questions on COVID’s origins, is the clearest sign yet of the renewed ties between them. Looking ahead this week and the World Economic Forum in Davos, Switzerland, kicks off this week. It’s an annual meeting where a global elite of business leaders, politicians, and economists make bold predictions and try to set the agenda for the year ahead. On Monday we will also see the release of the Westpac Consumer Sentiment a survey of about 1,200 consumers that asks respondents to rate the relative level of past and future economic conditions, employment, and climate for major purchases. On Thursday all eyes will be on the release of the Australian Jobless rate by the Australian Bureau of Statistics. The unemployment rate is expected to remain at 3.4%. Key Movers The Pound Sterling is slightly weaker when valued against the Greenback following Friday’s release of the University of Michigan (UoM) Consumer Sentiment for January in the US, which exceeded estimates, while the poll showed that inflation expectations for one-year were downward revised. At the time of writing, the GBP/USD is trading at 1.2196 after hitting a daily low of 1.2150. On the UK data front the Gross Domestic Product (GDP) unexpectedly grew by 0.1% in November as consumers headed to the shops in the run-up to Christmas and pubs and bars enjoyed a boost from the men’s World Cup. Raising the government’s chances of avoiding a long recession, City economists said hard-pressed consumers had proved more resilient than forecast despite the cost of living crisis. However, business groups warned that the economy was likely to suffer over the coming months as higher mortgage rates and the withdrawal of state support for energy bills begin to hit disposable incomes further. Cost of living pressures are likely to become more acute this year as tax rises and the withdrawal of government subsidies take effect. The Bank of England has warned that the UK is probably set for a long recession, as defined by two consecutive quarters of contraction. The economy shrank by 0.3% in the third quarter between July and September, and figures for the October to December period will be published next month, confirming whether or not the economy entered recession at that point. Looking ahead to next week, the UK economic docket will feature labor market data, the Consumer Price Index, and Retail Sales. Expected Ranges AUD/USD: 0.6850 – 0.7050 ▲ AUD/EUR: 0.6350 – 0.6550 ▲ GBP/AUD: 1.7350 – 1.7550 ▼ AUD/NZD: 1.0750 – 1.0950 ▲ AUD/CAD: 0.9200 – 0.9400 ▲

Summary The 64.6 reading for consumer sentiment in January marks the top print in the past year. Relief on the inflation front and wage growth are lifting spirits, but still-sour buying conditions suggest the good vibes in this report may not translate into a spending surge. Source: University of Michigan and Wells Fargo Economics Sentiment Handily Exceeds Expectations, Still Historically Low The soft-landing camp will find plenty to like in today's preliminary read of consumer sentiment from the University of Michigan. The 64.6 reading for January, while low by historical standards, is still the highest reading in the past year and marks the biggest monthly pick-up since August. The outturn was more than three points above the rosiest forecast of the more than 50 economists surveyed by Bloomberg. Consumers may not feel awesome about their finances, but they are undoubtedly less worried than they were when gas prices were north of $4/gallon and wage growth wasn't keeping up with inflation. Current assessments of personal finances surged 16% to its highest reading in eight months thanks to higher incomes and easing inflation...and a bit of a bounce in the stock market certainly did not hurt either. The euphoria did not extend to the housing market. Home buying conditions improved slightly but are still very near the lowest levels on record. Elsewhere, buying conditions improved somewhat in January, potentially on the back of some recent reprieve in inflation, but a majority of households still view it as a bad time to buy a major household item or vehicle. We take this as a sign that higher financing costs are weighing on the purchases of these traditionally bigger ticket items. More plainly, the good vibes in this report may not translate into a spending surge. Source: Bloomberg Finance L.P, University of Michigan and Wells Fargo Economics Inflation Expectations Still Well-Anchored Inflation expectations continue to be the most important component of this release. To that end, short-term (1-year ahead) expectations slid to 4.0% in January marking the lowest reading since April 2021. The Fed will be happy to see short-term expectations reverting back to more normal levels. While longer-term expectations (5-10 years ahead) rose a tenth to 3.0% from December, they importantly remain well within the recent range and at a level the Fed will view as well-anchored. Expectations are important because if consumers anticipate higher inflation they may purchase more today in order to avoid higher prices tomorrow. This in turn further boosts demand-driven inflation, the very thing the Fed is working to counteract. It's not just consumer inflation expectations that matter either. Pricing plans of small businesses and market expectations for inflation are also key components in driving inflation lower. The latest data from the National Federation of Independent Business released earlier this week showed the smallest share of firms in two years reported plans to rise prices over the next three months. Longer-run market-based inflation expectations, measured by the difference between the 5-year Treasury rate and the 5-year Treasury inflation-indexed security rate (known as the 5-year, 5-year forward breakeven rate), also remain well-anchored. The consumer price data for December showed signs that inflation is continuing to slow and thus suggest the Fed will slow the pace of tightening at its next policy meeting on February 1 by electing to bring the federal funds rate up just 25 bps. Nothing in this report suggests otherwise. We expect the Fed to view well-anchored and improving inflation expectations as positive developments. Source: University of Michigan and Wells Fargo Economics