Summary
United States: A Moderating but Resilient U.S. Economy
- This week’s data depict an economy cooling in an orderly fashion: Inflation is easing gradually, consumer spending retains underlying resilience, and housing is finding a foothold as financing costs modestly retreat.
- Next week: Construction Spending (Wed.), Personal Income & Spending (Thu.)
International: Gentle Data Shifts, Anchored Policy Paths
- In an otherwise relatively quiet week for global economic data releases, the U.K.’s November GDP print delivered an upside surprise, though we still expect the Bank of England to remain on a gradual easing path. Meanwhile, India’s December inflation data showed a modest acceleration, unlikely to derail our expectations for one additional rate cut this year.
- Next week: China GDP (Mon.), Australia Employment (Thu.), Bank of Japan Policy Rate (Fri.)
Topic of the Week: More Pressure on the Federal Reserve Emerges
- News broke earlier this week that the Federal Reserve received grand jury subpoenas from the Department of Justice, escalating the Trump administration’s pressure on the nation’s central bank. While we do not believe this will alter the near-term course of monetary policy, it will make the next Fed Chair’s job that much more difficult to build a consensus among the 19 members of the Federal Open Market Committee.
