Fed Under Pressure: CPI Shock Or Rate-Cut Reset for Market?
Jerome Powell confirmed that U.S. Department of Justice has issued a grand jury subpoena to the Federal Reserve, escalating political pressure and reviving concerns over Fed independence.
Markets worry this could complicate the rate-cut outlook. This week’s December CPI may determine whether November’s soft reading was a one-off or the start of a real downtrend. CPI Estimates: 2.7%.
If CPI prints closer to swaps pricing, does the market need to reprice rate-cut expectations?