The previous week’s reins were held by the Federal Reserve’s Rate Decision and also the preferred inflation indicator, the PCE Index. With the PCE Index coming in well above the Federal Reserve’s 2% target, it suggests that rate cuts may be postponed much longer this year than initially anticipated.

Looking ahead, the upcoming week features the CPI and PPI inflation data reports, making for a busy schedule. However, this week’s reports are relatively limited in terms of significant market impact. The most notable releases include Unemployment Data and U.S. Wages, both of which will complement the inflation data to provide a broader outlook on the economy’s trajectory. Additionally, the Consumer Sentiment and Consumer Credit reports may offer insight into consumer conditions amid a changing administration and ongoing inflation. Notably, inflation has had a strong impact on markets such as eggs and livestock poultry, which have reached all-time high prices in the past decade.

With the holiday of the previous week in addition to an extremely light release week, only the Consumer Sentiment report is weighing in on the lending markets. With both the inflation reports showing inflation cooling off, there is still some optimism about where the Federal Reserve will take things. This optimism is only cooled by the uncertainty the new presidency will bring. Many markets have responded in kind, with lending partners showing a trend of increasing rates and other markets preparing for uncertainty. Within the next few months, we will see how the new administration intends to handle monetary policy. This will have a greater impact than the Federal Reserve on the direction things will be headed in the future. Next week will be the first FOMC Rate Decision of the year, with many being optimistic about a potential rate cut with the recent inflation data.