All three are aligned, more or less: price pressures need to ease before additional rate cuts are needed, and the jobs market must be monitored.
The outlier was Atlanta Fed President Raphael Bostic, who shone the spotlight on Fed independence in a farewell essay, titled ‘Farewell to the Best Job I’ve Ever Had’. Bostic is scheduled to step down and retire at the end of this month, having served as President at the Atlanta Fed since 2017.
Day Ahead
We have the Gorton and Denton by-election in the UK, with polling showing a three-way race between Labour, Reform, and the Greens. While this, of course, matters from a political perspective, I do not see it moving the market’s needle.
Today also brings the US weekly jobless claims for the week ending 21 February. Expectations ahead of the event suggest unemployment filings increased to 215,000, up from 205,000 in the week prior. The estimate range is currently between 230,000 and 203,000; given the forecast distribution, anything at or beyond these numbers could move the USD.
Another point to bear in mind ahead of this release is recent Fed speak – particularly from Boston President Susan Collins and Barkin – drawing attention to the jobs market being in a low-hire-low-fire mode.
Consequently, a meaningful upside surprise in today’s claims would likely reignite rate-cut speculation and weigh on the USD. A notably stronger claims reading would suggest more people are filing for unemployment insurance, underscoring that the low-fire part of the equilibrium could be breaking down and that layoffs are picking up.
Written by FP Markets Chief Market Analyst Aaron Hill