That would equate to 4 rate cuts between now and Christmas, one more than the Fed itself projected in its latest 'dot plot' forecasts but still more hawkish than the 6 cuts predicted by the CME futures market at New Year.
"Let's not get amped up on one month of CPI that was higher than it was expected to be," said Chicago Fed President Austan Goolsbee yesterday.
In fact, he added, and judging the annualized rate of consumer price inflation on 3-month and 6-month data, "It's totally clear that inflation is coming down.
Like retail sales, US industrial output also fell last month, new data said Thursday, down 0.1% instead of growing 0.3% from December as analysts forecast.
Yet the more 'industrial' precious metals extended yesterday's rebound from their inflation-data plunges, with silver rising back above $23 – more than $1 per ounce above Wednesday morning's 4-week low – as platinum and palladium prices hit
1- and 2-week
Longer-term bond prices rebounded with gold, driving down the yield offered by 10-year Treasury debt to 4.20% per annum, down from the 12-week high of 4.31% hit on Tuesday's inflation data.
"The FOMC's response to tightening [rates] after the Covid pandemic was not textbook," says an
co-authored by Fed Governor Chris Waller – himself a voting policymaker on the Federal Open Markets Committee – because "it involved much faster tightening of policy than had been seen in more than 30 years."
Even so, "policymakers' actions have coincided with stable financial markets, a strong labor market, and inflation moving down from its peak."
But "we [still] need to see continued good data before we can begin the process of reducing the federal funds rate,"
Fed vice-chair for banking supervision Michael Barr in separate remarks.
With gold prices in US Dollar terms hitting the lowest yesterday since mid-December, the giant New York-listed SPDR Gold Trust (NYSEArca: GLD) – the world's largest gold-backed ETF product – saw shareholders liquidate another 0.2% of the fund, shrinking it to the smallest since August 2019.
The smaller iShares IAU
also shrank yet again, down 0.1% to the smallest since March 2020 and erasing the last of the 36.1% growth which then followed during the first 8 months of the global Covid pandemic.
Today the Euro and
UK gold price
in Pounds per ounce also rallied, edging up 0.6% and 1.0% respectively from late-Tuesday's 3-week lows at €1852 and £1579.
"Wage growth continues to be strong," said European Central Bank president Christine Lagarde to lawmakers in
, "[becoming] an increasingly important driver of inflation dynamics.
"[So while] the current disinflationary process is expected to continue," the head of the ECB went on, the highest ever interest rates in the Euro's 25-year history "[must be] maintained for a sufficiently long duration...[to] lead us sustainably to our 2% target" for inflation across the 20-nation single currency zone.
Eurozone GDP will grow only 0.8% in 2024,
from the European Union said Thursday, down from the prior 1.2% prediction.
The UK ended 2023 in recession,
said today. Yet the Bank of England sees a "somewhat stronger growth story" ahead, governor Andrew Bailey claimed earlier this week, telling lawmakers in London that the fact UK inflation – still the highest among major developed economies – did not accelerate in January "[is] obviously encouraging relative to where we could have been."