(Bloomberg) – US inflation showed slight signs of downward momentum at the beginning of the year, but healthy employment growth is taking on the economy and keeping boundaries at interest rates for now I supported the attitude.
Federal Reserve Chairman Jerome Powell, who provides senators with six-month testimony on Tuesday and Wednesday, highlights a resilient economy as an important reason why central banks are not rushing to further reduce borrowing costs. It may be. With the economy in a good place, Fed officials also have time to assess the impact of the new Trump administration’s policy changes on trade, immigration and taxes.
The Bureau of Labor Statistics is scheduled for Wednesday, just before the second half of the two-day testimony marathon, with the consumer price index, excluding food and energy, rising 0.3% in January in the last six months. is predicted to indicate.
Compared to a year ago, Core CPI is projected to have risen by 3.1%. Although slightly lower than the annual figures in December, this is a mere 0.2 points lower than the mid-last year.
After a significant decline in 2023 and early 2024, progress towards further development has essentially stagnated, as the job market unfolded late last year. On Friday, labor sector data showed payroll growth over the three months from January to January. The average was the strongest in a similar period since early 2023.
This will help explain why Fed officials are happy to endure putts for the time being after the full 2024 cut. Furthermore, proposed policies from the Trump administration maintain the risk of maintaining inflation.
“Chairman Powell said the Fed should see “real progress” in terms of inflation or some labor market debilitation. I think the January CPI provides complicated evidence. We expect both headline and core CPI inflation to increase by 0.3%. ”
– Anna Wong, Stuart Paul, Eliza Winger, Estelle Ow, Chris G. Collins, Economist. For a complete analysis click here
The CPI report also includes annual updates to seasonal adjustment coefficients and reemphasis on components that enter the index, but retail sales in January continue on Friday. Economists estimate another healthy advancement in merchant receipts that month, with the exception of car dealers.
Meanwhile, the announcement that President Donald Trump intends to announce mutual tariffs this week will be monitored for their potential impact on both the US and the global economy. The Brazilian government is mapping sectors of the economy that could be affected by the Trump trade war and measuring measures that could be adopted in the case of US-imposed tariffs, Forja de S. Paulo said It was reported on Sunday.
Looking north, the Bank of Canada’s deliberation overview provides insight into the central bank’s move to strip all advance guidance from rate decisions due to uncertainty in Trump’s tariff threat.
Elsewhere, UK growth data, testimony from the European Central Bank president, consumer prices in India, and fee decisions from Russia to Peru will be one of the highlights.
Click here to learn more about what happened last week. Below is our rap of what is happening in the global economy.
Asia
Data released on Sunday shows China’s consumer inflation has accelerated for the first time since August, due to a burst of household spending during the month’s New Year holidays, despite continued deflationary pressures. Ta.
For the rest of the week, India will be the main focus after the world’s fifth-largest economy unexpectedly reported its weakest growth since the pandemic. The central bank on Friday implemented first-class cuts in almost five years.
On Wednesday, industrial production figures could indicate that India’s activity would slow in December and consumer prices would be slower in early 2025 than they would have since August. However, wholesale prices could accelerate another measure of inflation. We will also get January trading data on Friday.
Moving east, consumer confidence data is expected early in the week from Indonesia, Vietnam will provide numbers on vehicle sales, and Malaysia will release its final reading of its fourth quarter GDP.
The Philippine Central Bank is projected to cut its lending rate by 25 basis points on Thursday following a fall in the US price, which has a major impact on the country’s measurement of inflation.
In South Korea, the unemployment rate for January, scheduled for release on Friday, shows the labor market situation after the unemployment rate surged to its highest level since the previous month’s 2021. Import and export price figures look at demand in January after trade activity declines.
Prices for Japanese producers accelerate each year, and may hold the company from the previous month to January. On Wednesday, the country will release its January machine tool order. This is a snapshot of global demand as it is one of the largest manufacturers in the world. This scale jumped the most since June the previous month.
Finally, Australia will release some measure of how the country feels, with business trust in January and consumer sentiment and inflation expectations in February. New Zealand issues credit card retail spending, two years of inflation expectations and manufacturing activities. Food prices for January have also been made public.
Europe, Middle East, Africa
Following the moves by the Bank of England to cut its 2025 growth forecast and data next week to reveal the economic performance at the end of 2024.
Forecasters are split on how GDP was carried in the fourth quarter, with some considering a slight contraction of 0.1%, while others have stagnated or slightly grown. I’m even looking at things.
BOE’s speech is also attracting attention. Katherine Man is Katherine Man (one of two staff members who asked for a half point rate cut) scheduled for Tuesday. Appearances by Gov. Andrew Bailey and policy maker Megan Green are also available on the calendar.
In the eurozone, industrial production on Thursday was the highlight, with the final inflation count from Germany and the final inflation count from Spain the following day. The second read of GDP for the region is scheduled for Friday.
The leadership among speakers at the European Central Bank is President Christine Lagarde, who will testify to lawmakers on Monday.
Elsewhere in the region, consumer pricing data is a major focus.
In Switzerland, the first inflation reading for 2025, scheduled for Thursday, set the tone for the Swiss National Bank’s next move, cutting borrowing costs by half points in December. January saw a cut in electricity costs to weigh inflation, with the median economist forecast of just 0.4%, the lowest since 2021.
Norway’s report on consumer price growth on Monday is expected to remain stable at 2.2%, with GDP counts coming out the next day.
Egypt’s central bank on Monday will focus on inflation. It continues to be slower and another sign of a solid downward trend that could allow authorities to begin interest rate cuts in the coming months.
In Israel on Friday, data could indicate that for the seventh consecutive month it exceeded the 3% cap of central bank target range. Analysts expect it to be faster to 3.8% after unexpectedly slowing to 3.2% in December.
Many central bank decisions are scheduled:
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In Namibia on Wednesday, policymakers will likely cut the rate for the fourth straight time as inflation sits comfortably at the bottom edge of the target band, between 3% and 6%.
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Zambian officials will likely maintain the rate of 14%, and price growth is expected to begin to ease as the effects of last year’s drought and the sudden depreciation of Kwacha begin to dissipate.
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Also, on Thursday, nearby Rwandan financial authorities could raise borrowing costs high enough to return to positive actual rates.
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Serbia’s central bank is also scheduled for decision on Thursday. Officials can resume easing after stabilizing borrowing costs for four months, but sudden energy prices remain sources of inflationary pressure.
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The Russian Bank’s first meeting in 2025 will be closely monitored on Friday after shocking 21% of analysts in December.
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On the same day, in Romania, central banks are expected to hold off interest rates as political and financial risks cloud the outlook for inflation.
latin america
Central Banks, Brazil and Chile, will be in a week with an economist’s hopes survey ahead of Brazil’s January consumer pricing report. The one-off electricity bill credits are expected to slow inflation last month and should be reversed in February.
Mexican watchers strike any index of demand and output that could refer to the risk of a recession. Manufacturing in December, industrial production, and the same store sales in January are highlights of Latin America’s second economy.
Chile’s central bank will post minutes of its January 28th meeting. At the conference, policymakers did not change the key rate to 5%. Authorities are becoming more cautious as they are shocked close to inflation.
Forgive President Javier Mairi if he doesn’t resist yet another victory lap in his burnt Earth battle to curb inflation in Argentina.
The initial consensus for annual printing in January 2025 was close to 67%, starting from 117.8% in December and 289.4% in April last year. This is the lowest since June 2022, as monthly measurements settled below 3%.
Inflation in Peru’s capital is below the midpoint of its target range, but core readings – stripped of energy and food costs – continue to rise. With that in mind, central banks may hold their key rates on hold.
– Support from Paul Wallace, Tony Halpin, Bastian Benras Wright, Tom Reese, Katia Dmitrieva, Robert Jameson, Laura Dillon Kane, Monique Vaneck and Piotl Skolimowski.
(Updated Brazilian preparations for trade war in the 8th paragraph)
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