US data this week to clear fog over state of US economy

Matthew Ryan, CFA Ebury

The fog over the state of the US economy should in large measure dissipate this week. The nonfarm payrolls report on Tuesday is expected to show a labour market that is still generating new jobs, contrary to Powell's downbeat comments at the Fed's post-meeting presser last week.

The CPI report for November will actually cover two months of price increases, as the October data was cancelled for the first time in history. While this week’s data is expected to show that no further progress has been made in bringing US inflation down to the Fed's target, the dispersion in predictions is unusually wide due to the uncertainty.

As we had anticipated, last week’s “dot plot” of rate predictions showed just one further cut in 2026 and another in 2026, albeit the gap between the hawks and the doves has perhaps never been so large.

By week's end we should have a much clearer idea of the state of the Fed's competing goals - low inflation and full employment - as we head into 2026.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

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