💣No Fed pivot in the near term🔫

The latest FOMC minutes dashed away hopes that the Fed will move away from an aggressive rate hike. Instead, the minutes discussed the risks of the current elevated inflation, which are mounting. Indeed, the cost of not taking bold steps now will lead to a higher price in the future. 

There has also been a note that any premature departure in monetary tightening that aims to tame inflation tend to lead to unfavourable outcome based on the historical standard. 

🎯Pain ahead is still on the way💸

Uncle Powell has also recently spoken, referencing historical occurrences of ending the fight against inflation too early. On several occasions, he acknowledged the pain, such as higher unemployment and a reduction in economic output. Yet, these are the by-product of the necessity of actions to hold inflation back to the Fed’s 2% target. 

💎Some doses of dovish, but hawkish remains🗽

There have also been some light-hearted comments that the collective rate hikes may bring down economic demand more than required, given that policy tends to have a lag time. As such, a timely calibration of policy stance may be warranted in a rate hike to alleviate the risk of downside risk to the economy. 

This helps to give indices some level of support in a relatively muted trading session. 

📮What’s on the menu today?📖

The highlight of the week, which we all have been waiting for, has arrived. 

Core CPI data will be released at 8.30 pm, and we should see moderate growth of 0.5% from 0.6%. 

Initial jobless claim data will be released simultaneously, and we can expect a modest climb to 225K from 219K.