FED: Gov Bowman: We Should Be Ready To Adjust Rates Toward Neutral

Fed Vice Chair for Supervision Miki Bowman said Friday that while she didn't elect to cut rates in January, she could be ready to cut in March. She made clear that she saw 3 cuts this year in the December Dot Plot (as MNI had assumed), making her one of the biggest doves on the Committee. (speech text here: https://www.federalreserve.gov/newsevents/speech/bowman20260130a.htm) * "I continue to see policy as moderately restrictive, and, looking ahead to 2026, my Summary of Economic Projections includes three cuts for this year." * The key is that "downside risks to the labor market have not diminished, and we should not overemphasize the latest reading on the unemployment rate...My view is that we should continue to focus on downside risks to our employment mandate, and the description of the labor market is helpful to communicate that we are not overly confident. History tells us that the labor market can appear to be stable right up until it isn't." * "Absent a clear and sustained improvement in labor market conditions, we should be ready to adjust policy to bring it closer to neutral...we should also not imply that we expect to maintain the current stance of policy for an extended period of time because it would signal that we are not attentive to the risk that labor market conditions could deteriorate." * "In my mind, the question at this meeting was about the timeline for implementing these cuts, essentially choosing between continuing to remove policy restraint and arriving at my estimate of neutral by the April meeting, or moving policy to neutral at a more measured pace throughout this year." * "I am also reluctant to take meaningful signal from the latest data releases given the statistical noise introduced by the government shutdown" but "Given that by the time of our March meeting we will have received two additional inflation and employment reports, I saw merit in waiting to take action."

US DATA: BLS Economist Matsumoto To Be Nominated As Commissioner: WSJ

The Wall Street Journal reports that President Trump will nominate Brett Matsumoto as the next Commissioner of the Bureau of Labor Statistics. The role has not been filled since Trump fired Commissioner McEntarfer in September shortly after weaker-than-expected nonfarm payrolls report, accusing her of manipulating the data for political reasons. * Importantly what little we know about Matsumoto suggests that he shouldn't have too much difficulty receiving Senate confirmation, as he has relevant experience and educational background, with little in the way of political entanglements. From the WSJ report: "Matsumoto has worked as an economist at the BLS since 2015. Before spending much of the past year on assignment with the White House Council of Economic Advisers, he had no experience working in a political capacity. He earned a Ph.D. in economics from the University of North Carolina at Chapel Hill in 2015. Matsumoto didn't respond to requests for comment." * Trump's previous nominee, E.J. Antoni, had his nomination withdrawn in October due to key Senators on the relevant Committee having reservations over his appointment. NPR reported at the time "Antoni's selection was praised by Trump loyalists like Stephen Moore and Steve Bannon. But it was roundly criticized by even conservative economists. Opponents said Antoni - who has spent most of his career at right-wing think tanks - lacked the expertise in statistical number crunching that's typical of previous BLS commissioners. A group of BLS supporters issued a statement Tuesday urging the president to choose a new nominee with a technical and non-partisan background."

COMMODITIES: Precious Metals Slump Amid USD Recovery

* The broad rally in the US dollar on Friday has prompted a further extreme sell-off in metals prices, particularly precious metals which have plunged sharply. * Headlines suggesting that Iran want to make a deal and the confirmation of Kevin Warsh as President Trump's nomination for the new Fed Chair have driven the dramatic corrections. * Spot gold fell to a low of $4,690/oz in recent trade, down more than $700 on the day, before bouncing slightly. At typing, gold is down by 9.0% around $4,891/oz. * Today's correction has allowed an overbought trend to unwind. Price has pierced firm support at $4,840, the 20-day EMA, as well as $4,756.1, the Jan 21 low. A clear break of these levels would expose $4,546.3, the 50-day EMA. * Silver has seen an even more extreme correction, falling to a low of $73.96/oz in recent trade, almost 40% below yesterday's record high. * Currently, silver is down by over 27% on the session around $84.3/oz. * The move lower has seen price break below the 20-day EMA at $93.75, and briefly pierce the 50-day EMA at $79.36, before bouncing slightly. * Elsewhere, crude markets flipped into daily losses following Trump's comments on Iran looking to make a deal. However, the continued geopolitical risk premium provides WTI with a gain of around 6.5% on the week. * WTI Mar 26 is down by 0.5% at $65.1/bbl. * A bull cycle in WTI futures remains intact and a clear break of key resistance at $66.49, the Jul 30 2025 high, would open $69.80, the Jun 23 high '25 high.

LATAM FX: USD/Latam Pairs At Weekly Highs Amid Slump in Metals Prices

* Latin American currencies have extended their losses through Friday's session amid the sharp rally in the US dollar following Trump's nomination of Kevin Warsh for Fed chair and associated extreme corrective pullback in metals prices. Spot gold is currently down by over 10% on the session, falling to a low of $4,696.5/oz, while silver has slumped by almost 30% to near $80/oz, around $40 below recent highs. * Against this backdrop, USDBRL has rallied by 1.3% to a high near 5.28 in recent trade, unwinding most of this week's earlier losses. The move pierces initial resistance at 5.2638, the Nov 11 2025 low, with key resistance at 5.3696, the 50-day EMA. * Similarly, USDMXN has bounced by 1.2% on the session to around 17.45 at typing, leaving the pair marginally higher on the week. The move has narrowed the gap to initial resistance at 17.5696, the 20-day EMA. * Elsewhere, USDCLP has risen by 1.8% towards 875, as a corrective pullback in copper has weighed on the peso. The move has significantly narrowed the gap to initial resistance at 880.20, the 20-day EMA. Short-term gains are considered corrective.