TechFlow news, January 13 — According to Jinshi Data, Matt Weller, Head of Market Research at Forex.com, said the year-on-year increase in overall and core U.S. CPI for December is expected to be 2.7% each. Overall, the disinflation process toward the 2% target has stalled for over a year, with headline CPI consistently ranging between 2.3% and 3%, while core CPI remains in the mid-to-high range of 2.5%-2.9%. Although inflation continues to run above target, the Fed's concerns about the labor market are still seen as a more pressing issue, leading markets to expect further cuts in the federal funds rate this year. However, the implied probability of another rate cut at the March meeting stands at only around 25%, and markets are confident the Fed will hold rates steady this month. Over the weekend, news that the U.S. Department of Justice subpoenaed Powell added an extra risk to the Federal Reserve’s independence. While still a low-probability event, it raises the possibility that Trump could prematurely replace the Fed Chair. If such a scenario were to occur (though still unlikely), we might see more aggressive rate cuts regardless of current inflation data.
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