This week is packed with economic updates, so let’s get started! On Monday, we’ll see the Chicago and Dallas Fed Indexes, followed by the Richmond Fed Index on Tuesday. These should give us a sneak peek at what the January ISM Index might look like.

The week heats up even more with big releases like the preliminary Q4 GDP figure, the Employment Cost Index (ECI), and personal income (including core PCE). But let’s be clear - all eyes will be on the Fed come Wednesday. While some are speculating about political pressure, we’ll be focused on what the Fed has to say about inflation.

Don’t miss Wednesday’s Consumer Confidence report—it could give some insight on where the yield curve and monetary policy might be headed. Bottom line? It’s going to be a busy week in the markets, so stay tuned.

The Macro Week Ahead

A Busy Week Ahead - January Wrap-Up: 
We’ll close out January with a wealth of data and the Federal Reserve's policy meeting on Wednesday – another packed week lies ahead.

Regional PMIs for December & January: 
This morning we’ll get the Chicago Fed National Activity Index for December as well as the Dallas Fed Manufacturing Activity report for January. The Dallas Fed outlook suggests the cyclical economy may have bottomed in 2024, with the index moving into positive territory last month for the first time since early 2022. On Tuesday, the Richmond Fed will release its January data, which also points to a positive shift in recent months. It’s possible these positive shifts could reflect some optimism following the election results.

All Eyes on the FOMC Meeting:
On Wednesday, the Federal Reserve will announce its latest policy rate decision. The U.S. federal funds target rate peaked at 5.5% in August before 100 basis points worth of rate cuts. With disinflationary pressures subsiding, consensus expects the Fed to pause its rate-cutting cycle. We’ll be watching closely to see if Chairman Powell addresses recent comments from President Trump, who has suggested the Fed should lower interest rates.

Critical Data Following the Fed Decision: 
The sustainability of U.S. economic growth will likely be a key factor in the Fed's decision on whether to pause its easing cycle. To that end, we’ll get the Q4 GDP report the day after the FOMC meeting. The annualized quarter-over-quarter growth rate is expected to come in at 2.6%, down from 3.1% in Q3. The Atlanta Fed's GDPNow forecast is slightly more optimistic at 3%. Within the report, we’ll be focusing on personal consumption (which is expected to grow by 3.1%), as it remains the largest component of GDP.

Friday's Inflation Data Is A Key Event: 
Friday brings key inflation data, starting with the Q4 Employment Cost Index, which is expected to rise by 0.9% quarter-over-quarter, bringing the year-over-year increase to ~4%. Changes in immigration policy and reduced labor supply could make this one of the most important economic series to monitor this year. Additionally, we’ll see the Core PCE Index, a critical input to Fed policy. For December, the index is expected to rise 0.2% month-over-month, or 2.8% year-over-year. A PCE reading significantly above or below expectations could trigger short-term volatility in the equity markets.

The Macro Specialist Designation (M² SD)

Learn More Here: https://themacroinstitute.com/

The Macro Week In Review

Macro Job Board

Global Market Strategist @ New York Life Investments (New York)

In this role you will develop capital markets perspectives, portfolio strategy, and trade ideas through original research and apply macroeconomic themes to alternative and private markets conditions. 

VP, Macro Research, Cross Asset Strategist @ JP Morgan (New York)

You will focus primarily on developing and presenting a broad strategic and tactical asset allocation across different products/markets and jurisdictions. You will part of a team that has the objective to develop a coherent framework for valuations and positioning across asset classes.

Global Macro Research Analyst @ Goldman Sachs (Washington, DC)

This candidate will closely monitor political and policy developments 
and assist economists to publish timely and innovative research on macroeconomic, political, and policy developments and their economic impact. They will also work on economic research projects and publications.

What We Read This Weekend

1. Trump Promised To Tackle Cost-Of-Living - Now He’s Risking Inflation

2. The Case For Passive Investing May Have Never Been More Precarious

3. Trump’s Return Nudges Economists’ Inflation Outlook Higher

Have feedback? Simply reply to this email to tell us what you like and don’t like about Macro Mondays!