With a plethora of improved inflation data and softening real indicators, markets are scaling back expectations about the US Federal Reserve’s rate path and betting the Fed will pivot towards accommodation this year. Their optimism might prove right. But for the time being it’s premature and uncertainty still abounds. Fed Chair Jerome Powell may need to rein markets in at the Federal Open Market Committee meeting on 25-26 January. The FOMC is likely to step down the pace of its rate hikes from 50 to 25 basis points. Many market participants are now betting the Fed won’t hike the Fed Funds rate above 5% and will cut ... (full story)