FED: Ex-Gov Warsh: Fed Has Failed To Satisfy Price Stability Remit

StatCan published a preliminary estimate that wholesale sales ex petroleum, products, other hydrocarbons, oilseed & grain rose 0.4% M/M in February.

• While still a prelim estimate, and a pullback from 1.2% in January, this would still mean elevated growth in wholesale sales on a 3M/3M annualized basis (7.4%, after 8.1%,), and the highest Y/Y rate (using SA series as a comparison) in 10 months (3.1%).
• The reading "reflects higher sales in the machinery, equipment and supplies subsector", per StatCan.
• Friday's GDP release brings expectations for a pickup in January growth to 0.3% M/M vs 0.2% prior - the chart below shows that after January's pickup in both wholesale and manufacturing sales, activity is seen to have weakened in February.

• RES 4: 165.43 High Nov 8        
• RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance   
• RES 2: 164.55 High Jan 7
• RES 1: 164.19 High Mar 18 and the bull trigger 
• PRICE: 162.48 @ 16:50 GMT Mar 26 
• SUP 1: 160.74 Low Mar 20
• SUP 2: 160.43 50-day EMA 
• SUP 3: 158.90 Low Mar 10  
• SUP 4: 158.00 Round number support 

The trend condition in EURJPY remains bullish and a recent sell-off appears corrective. This has allowed an overbought trend condition to unwind. Short-term pivot support to watch is 160.43, the 50-day EMA. A break of this level would signal potential for a deeper retracement. Sights are on 164.08, the Jan 24 high. It has been pierced, a clear break of this hurdle would strengthen a bullish condition and open 164.90, the Dec 30 ‘24 high.    

Despite a broader risk-off move in equities/the dollar - largely on an imminent announcement of auto tariffs this afternoon by President Trump - Fed funds futures are little changed.

• A May cut remains less than a 20% probability, while 2025 cuts were steady at an implied 63bp. 2 cuts remain the base case, with the first fully priced by July, and the second by October.
• Today's FOMC commentary reiterated that the Fed would likely be on hold for a prolonged period until there is greater clarity over government policy shifts: St Louis's Musalem called for the maintenance of a "patient approach", while Minneapolis's Kashkari said the outlook behooved a hold "for an extended period of time until we get clarity".
• Focus turns to Thursday's largely "hard" data, particularly what's expected to be a large (if idiosyncratically-driven) trade deficit for February, as well as jobless claims and final reading of Q4 GDP.