The Return of Data Dependence at the Fed

January 23, 2023

The Return of Data Dependence at the Fed Photo

Following a year where Federal Reserve (Fed) policymakers were singularly focused on reining in high inflation, recent communication from the Fed indicates the return of a more balanced approach, where new economic data drives monetary policy decisions. The recent softening in Fed language also suggests Fed officials are paying more attention to the bond market, where the rapid decline in rates to start the year indicates slowing economic growth may be the next challenge facing policymakers.

After a weak start to fourth-quarter earnings season, a number of significant earnings announcements are scheduled this week, including Microsoft, Boeing, Visa and Tesla.1 Economic data this week will be highlighted by the initial look at fourth-quarter gross domestic product on Thursday and updates on the Fed’s preferred inflation gauge — personal consumption expenditures — out Thursday and Friday.



1Source: MarketWatch- U.S. Economic Calendar; as of 1/23/23

Tags: Federal Reserve | Earnings | Economic data | Monetary policy | Bond markets

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