Next week is the release of Core CPI and PPI numbers for January, resulting in an extremely light week for the week. The only data release of note is the trade deficit and the usual unemployment reports. The current trade deficit for the U.S. is operating precisely within expectations and correlating GDP numbers. Next week will provide further guidance for the Federal Reserve as the next release of inflation data is released.

The largest and most impactful financial data being released is as always the Federal Reserve rate decision. This time it fit well within the expectations across the broader market and lending partners, in that the Federal Reserve still remains to hold current standing, and is showing push back on any potential rate cuts coming March when the next rate decision is planned.

It was an uneventful week for the data reports, as the majority of the interest waits for the Federal Reserve’s rate decision heading into the following week. One of the most notable reports is for New Home Sales, which had managed to greatly exceed the projections for the end of the year moving into January. It is an early sign that there is a surge in response to the week-to-week rate cuts we have been observing over the last two weeks.

The following week of CPI and PPI reports are typically lighter, with this week showing the same trend. There are a number of interesting interim reports that are worth noting however, including the Federal Reserve’s Beige Book which indicates the labor market has been cooling across most of the country. Following up is the Consumer Sentiment Reports, which is an excellent indicator for how the average consumer feels about their buying power, reflecting on the current economic conditions. Slower inflation, cheaper gas and a healthy economy have boosted optimism. Lastly, retail sales reports showing activity in December.

With the release of the CPI and PPI we received a clearer picture of what’s ahead. With the inflation numbers for CPI (Consumer Price Index) arriving a bit warmer than expected, there was some speculation that it could cause some hesitation from the Federal Reserve on reducing rates for this year.

With the first FOMC minutes of the year, it sets the tone of the potential moves the Federal Reserve will make, with them remaining firm in their current stance of not employing any rate cuts, however given the more recent end of year reports, there is a likelihood that rate cuts will start this year. The last change in rates was in July of last year. The second most important report also being the final PMI (Manufacturing) numbers, which has largely met expectations without any irregularities.