Institutions predict that the Federal Reserve may maintain interest rates unchanged in Q1

Forex.com's head of market research, Matt Weller, predicts that both the overall and core CPI in the United States will increase by 2.7% year-on-year in December. Over the past year, the process of inflation falling back to the 2% target has stalled, with overall year-on-year CPI growth fluctuating between 2.3-3% and core CPI remaining in the mid to high range of 2.5-2.9%. Although inflation is higher than the target level, the Federal Reserve is more concerned about the job market, and the market expects that the federal funds rate may be further lowered this year, the implied probability of a rate cut at the March meeting is only about 25%. In addition, the news of the US Department of Justice summoning Powell increases the risk of Fed independence or raises the possibility of Trump replacing the Fed chairman early. If this happens, there may be more aggressive interest rate cuts.