A blowout US payrolls report on Friday has caused investors to further dial back their expectations for interest rate cuts and put even greater focus on next week’s inflation figures.
Economists polled by Reuters expect Wednesday’s US consumer price index to show inflation of 2.8 per cent in December, up from 2.7 per cent a month earlier. They anticipate that core inflation, which strips out volatile components such as food and energy prices, will come in at 3.3 per cent, the same as November’s figure.
But, after fresh data showed US employers added 256,000 new jobs in the final month of 2024 — up from a revised figure of 212,000 in November and much higher than estimates of 160,000 — debate has intensified about how far the central bank can ease monetary policy in the face of a strong economy.