Weekly economic and financial commentary

Wells Fargo Research Team Wells Fargo

Summary

United States: Good Grief

Financial markets reacted in a zig-zag pattern to this week's economic data. Consumer prices surprised to the upside, led by core goods inflation showing little signs of slowing. At the same time, consumers have yet to meaningfully pull back on goods spending. This week's data reaffirm our view that the FOMC will press ahead with another 75 bps rate hike at its meeting next week.
Next week: Housing Starts (Tues.), Existing Home Sales (Wed.), FOMC Rate Decision (Wed.), Leading Economic Index (Thur.)

International: U.K. Inflation Slows, but BoE to Stay Hawkish / China's Move Through 7.00

Higher natural gas and oil prices have pushed inflation well above the Bank of England's (BoE) target range, and induced one of the more hawkish stances on monetary policy in the G10. In an effort to support economic activity, the People's Bank of China has eased monetary policy and lowered interest rates, moving against the grain of global monetary policy trends.
Next week: Brazilian Central Bank (Wed.), Bank of Japan (Thur.), Eurozone PMIs (Fri.)

Interest Rate Watch: Yields Push Higher Ahead of Next Week's FOMC Meeting

Treasury yields climbed to fresh highs this week as markets digested unexpectedly strong inflation data and its potential impact on next week's FOMC meeting.

Topic of the Week: Risk of Rail Shutdowns Is Avoided, Economic Fragility Remains

A nationwide shutdown of the freight rail system was avoided by less than a day this week, after negotiators came to an agreement under pressure from the White House. A short-term spike in inflation caused from supply disruptions was avoided by the deal, but longer-term inflationary pressures remain due to rising employee compensation.

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Wells Fargo Research Team

Wells Fargo

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold extends gains nearing $4,200 as US Dollar struggles

Gold heads north for the second consecutive day, trading near $4,180, with bulls aiming for the $4,230 area, the top of October’s trading range. Precious metals have been boosted by lower US Treasury yields and dovish comments from Federal Reserve officials this week, which have undermined speculative support for the Greenback.

Busy week for Ripple’s RLUSD: What changes for stablecoin holders?

Ripple’s RLUSD is gaining ground across institutional finance, with a major bank launching custody services, a new wallet integration making it easier for developers to build payments and agentic experiences on the network, and a brokerage platform planning to use the stablecoin for settlement.

Hot inflation, falling yields: A new test for global markets

Global markets are confronting a difficult combination: renewed inflation pressure, expensive capital and growing scrutiny of the investment supporting the AI boom. The most revealing development this week was the demand for government bonds even as US inflation accelerated. My assessment is that investors should treat this as a test of financing resilience.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.