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Feb-06 14:09
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EUROPEAN INFLATION: GS See Core CPI M/M Higher Than ECB Estimate
Jan-07 14:07
- We wrote earlier how Eurozone service CPI inflation momentum continued to cool in December despite the monthly pace increasing to 0.34% M/M, but also how there have been concerns in recent months about whether the seasonal adjustment process is biasing this lower.
- On that subject, Goldman Sachs write that they estimate sequential core inflation at a seasonally adjusted 0.33% M/M in December, “notably stronger than the ECB's estimate of 0.21%mom and higher than the November reading of 0.02%mom, driven by an acceleration in sequential services.”
- “We update our Euro area inflation path, and still expect core inflation to reach target sustainably by the end of 2025. As for headline inflation, we now see it slightly above target for the entirety of 2025.”
STIR: Effective Fed Funds Rate
Jan-07 14:03
FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $98B
- Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $280B
US: Two Key Meetings To Determine Republican Legislative Strategy
Jan-07 13:55
US President-elect Donald Trump will hold two key meetings with Republican lawmakers this week amid uncertainty over strategy to legislate Trump's agenda.
- On Wednesday, Trump will huddle with Senate Republicans in Washington. On the weekend, Trump will host a large, diverse group of House Republicans at his Mar-a-Lago resort. The Mar-a-Lago attendees are expected to include members of the conservative House Freedom Caucus, various committee chairs, and 'blue state' Republicans who are pushing to increase the State and Local Tax (SALT) deduction.
- Early statements from the Senate and Trump's transition team indicated a preference for two major filibuster-proof reconciliation bills, with the first to cover immigration and energy and the second to cover tax and spending. However, since the re-election of House Speaker Mike Johnson (R-LA), Trump has appeared to lean toward a single 'mega bill' strategy forwarded by House Republicans.
- A single reconciliation bill is likely the optimum strategy if the GOP is to ensure adequate Congressional time to extend the Trump tax cuts that expire at the end of the year and avoid a confrontation with House conservatives who are likely to resist passing two high-cost reconciliation bills in one year.
