Global markets are focused on US inflation figures. The importance of inflation data has increased even more after cautious messages from Fed Chairman Powell. Clues regarding the Fed’s monetary policy will be sought in this critical data.

In global markets, a mixed course stood out with US President Donald Trump’s tariff decisions and comments from Federal Reserve (Fed) Chairman Jerome Powell that they will continue to be cautious about interest rate cuts. While the inflation-recession dilemma continues worldwide, Trump’s tariff decisions are affecting the direction of the markets. Trump’s signing of a decree imposing a 25% customs duty on steel and aluminum imports as well as tariff measures on important trade partners of the US are fueling concerns about possible “trade wars.” The fears that Trump’s decisions could increase inflationary pressures in the US and the concern that the Fed, which has made significant progress in combating inflation so far, may narrow its policy space in the future, emerge as another factor complicating pricing.
INFLATION AND POWELL’S MESSAGES TO BE WATCHED
However, inflation data to be announced in the US today and signals from Fed Chairman Powell’s presentation to the House Financial Services Committee are being closely monitored.

Clues about the Fed’s projections will be sought in this inflation data.

It is expected that the US inflation rate will remain steady at 2.9% in January.

CAUTIOUS STATEMENTS FROM POWELL
On the other hand, Fed Chairman Powell began his presentation to the US Congress on the Semi-Annual Monetary Policy Report yesterday. Participating in the hearing held by the Banking, Housing, and Urban Affairs Committee of the US Senate on the first day of his presentation, Powell said that the US economy is generally strong and that the bank has made significant progress in line with its goals over the past 2 years. Powell noted that labor market conditions have softened but continued to remain strong, and that inflation has come very close to the long-term 2% target but still remains somewhat high. The Fed Chairman said, “Due to our policy stance being significantly less restrictive compared to before and the economy continuing to stay strong, there is no rush for us to adjust our policy stance.