The Fed: On hold for now, but sensitive to unemployment. The FOMC’s January statement and Chair Powell’s press conference contained important changes that the market has taken as slightly hawkish, reducing pricing for rate cuts this year. We differ slightly in hearing Chair Powell as still leaning dovish. The Fed is clearly data watching to determine its next move, but we sense particular sensitivity to any potential labour market weakness that implies a cut in May is possible even if March is highly unlikely.
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