Bitunix analysts highlight a growing contradiction in the market as Federal Reserve officials maintain a hawkish stance despite weakening economic indicators. Cleveland Fed President Loretta Mester and Dallas Fed President Lorie Logan, both FOMC voters, have emphasized the possibility of maintaining or even increasing interest rates to combat inflation, despite recent data suggesting a slowdown in growth.
U.S. retail sales in December were flat, missing expectations, and bond markets reacted with falling Treasury yields. The probability of a rate cut next month has increased to 19.6%, with markets anticipating multiple cuts this year. This divergence between official rhetoric and market data suggests that upcoming employment and CPI figures will play a crucial role in shaping interest rate expectations.
Fed Officials Signal Hawkish Stance Amid Weakening Economic Data
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