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The futures-implied Fed funds path shows slightly more anticipated easing following the release of the January FOMC minutes.
2025 Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Prior Session (Feb 18) | Chg Since Then (bp) |
Mar 19 | 4.32 | -0.6 | -0.6 | 4.32 | 0.0 |
May 07 | 4.30 | -3.3 | -2.7 | 4.29 | 0.7 |
Jun 18 | 4.20 | -13.1 | -9.8 | 4.21 | -0.7 |
Jul 30 | 4.15 | -18.2 | -5.1 | 4.16 | -1.0 |
Sep 17 | 4.06 | -27.2 | -9.0 | 4.08 | -1.8 |
Oct 29 | 4.02 | -31.3 | -4.1 | 4.03 | -1.5 |
Dec 10 | 3.96 | -37.4 | -6.1 | 3.98 | -2.3 |
AUDUSD is trading at its recent highs and a bull theme remains intact. The pair has cleared 0.6331, the Jan 24 high and a key short-term resistance. The breach highlights a stronger reversal and paves the way for gains towards 0.6414, a Fibonacci retracement. Note that moving average studies remain in a bear-mode position. This suggests the latest recovery is a correction. Initial firm support to watch is 0.6231, the Feb 10 low.
Government policy shifts were indeed a key risk to inflation for FOMC participants: "other factors were cited as having the potential to hinder the disinflation process, including the effects of potential changes in trade and immigration policy as well as strong consumer demand" while "business contacts in a number of Districts had indicated that firms would attempt to pass on to consumers higher input costs arising from potential tariffs".