This week markets will be focused on Inflation and Fed Chair Powell

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Published Date 2/10/2025

We have a heavy calendar this week, although nothing today. The keys this week, Jerome Powell testifying the Senate Banking Committee tomorrow and the House Financial Services Committee Wednesday, his required semi-annual appearance. Inflation data on Wednesday and Thursday (January CPI and PPI). Treasury auctions of new 10s and 30s.

More tariffs: President Trump announced 25% tariffs on steel and aluminum, he stated the tariffs would apply to all countries but did not specify when they would take effect.

We all want long term rates to decline, that is a tall order and faces heavy headwinds, inflation fears, the Fed’s decision to hold off rate cuts a the short end of the curve, and in the back of the bus currently the rising federal debt.

At 9:30 am the DJIA opened +254 after declining 444 on Friday, NASDAQ opened +132 from -269, S&P +30 from -58. The 10 year at 9:30 am 4.48% -1 bp. FNMA 6.0 30 year coupon at 9:30 am +4 bps from Friday’s close and +2 bps from 9:30 am Friday.

This Week’s Economic Calendar:

Tuesday,

6 am January NFIB small business optimism index (104.7 from 105.1 in December)

10 am Powell at the Senate Banking Committee

1 PM $58B 3 year note auction

Wednesday,

7 am weekly MBA mortgage applications

8:30 am January CPI (month/month +0.3% from +0.4%, year/year +2.9% unchanged; core month/month +0.3% from +0.2%, year/year +3.2% unchanged)

10 am Powell at the House Financial Services Committee

1 pm $42B 10 year note auction

2 pm January Treasury budget statement

Thursday,

8:30 am January PPI (month/month +0.2% unchanged, year/year +3.2% from +3.3%, core month/month +0.3% from 0.0%, year/year +3.3% from 3.5%)

Weekly jobless claims (215K from 219K)

1 pm $25B 30 year bond auction

Friday,

8:30 am January retail sales (month/month 0.0%, ex vehicles +0.3% from +0.4%)

January import and export prices (month/month imports +0.4%, month/month exports +0.3%)

9:15 am January industrial production and capacity utilization (production +0.3% from +0.9%, cap utilization 77.7% from 77.6%)

Source: TBWS

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