Federal Reserve Indicates Steady Interest Rates

Michael Brown from Pepperstone predicts that the upcoming non-farm payroll report will bolster the US dollar, reinforcing a narrative of 'American exceptionalism' and contributing to a hawkish stance from the Federal Reserve compared to other G10 nations. Federal Reserve officials confirm plans to maintain interest rates for an extended period, with a focus on inflation trends before making cuts. The Fed's recent minutes indicated concerns over potential inflationary pressures linked to President-elect Trump's tariffs, even after a rate cut last month. In contrast, the People's Bank of China is set to issue central bank bills in Hong Kong to stabilize the yuan, while Japan's economy shows signs of wage growth amidst labor shortages. Additionally, China's commerce ministry criticized the EU for unfair trade barriers against Chinese firms, highlighting ongoing tensions in international trade. The CME's Fed Watch tool shows a high probability that the Fed will keep interest rates steady in January, with minor chances for cuts in the near future.