🚨 FED SIGNAL:
Fed’s John Williams has cautioned that the latest CPI inflation data may be slightly understated, implying underlying inflation could be higher than headline numbers suggest.
Why this matters:
This reinforces the Fed’s slow, cautious stance on interest rates. If inflation is not fully under control, policymakers have less room to ease — even if markets are hoping for faster cuts.
Market impact:
Rate-cut expectations stay fragile
Volatility remains elevated
Markets become extremely data-dependent
What to watch next:
Upcoming inflation and labor data now carry extra weight. A single upside surprise could quickly reset expectations and reprice risk assets.
Bottom line:
Confidence is thin, positioning is sensitive, and the margin for error is small. The market knows the full picture may not be visible yet.
