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Next week's macro outlook: CPI and "horror data" may overturn expectations of rate cuts, and the Fed turns to a cautious stance

next week the US will release a number of heavyweight data, including PPI, CPI, and "terrifying data", which will continue to bring volatility to the market. The following are the key points that the market will focus on in the new week:

At 00:00 on Tuesday, the 1-year inflation expectations of the New York Fed for December in the US;

At 21:30 on Tuesday, the PPI data for December in the US;

At 23:00 on Tuesday, 2025 FOMC voting committee member and Kansas Fed President Schmid will deliver a speech;

At 04:00 on Wednesday, FOMC permanent voting committee member and New York Fed President Williams will give an opening speech at an event;

At 21:00 on Wednesday, 2027 FOMC voting committee member and Richmond Fed President Barkin will deliver a speech;

At 21:30 on Wednesday, the CPI data for December in the US and the New York Fed manufacturing index for January;

At 23:00 on Wednesday, 2026 FOMC voting committee member and Minneapolis Fed President Kashkari will deliver a welcome speech and participate in a fireside chat at an online regional economic conference hosted by the Minneapolis Fed;

At 00:00 on Thursday, FOMC permanent voting committee member and New York Fed President Williams will deliver a speech;

At 01:00 on Thursday, 2025 FOMC voting committee member and Chicago Fed President Evans will deliver a speech;

At 03:00 on Thursday, the Fed will release the Beige Book on economic conditions;

At 21:30 on Thursday, the US will release the initial jobless claims for the week ending on January 11 and the retail sales rate for December.

As the Fed shifts to a more cautious stance, there were some encouraging signs in the November CPI report that the rise in prices for housing and broader categories of services (which are the largest contributors to sticky inflation) has begun to ease. This makes it possible for the CPI data scheduled to be released next Wednesday to show a downside surprise, but any slowdown is more likely to occur in the first few months of 2025 than in the December CPI data last year. Before the CPI data is released, investors will focus on the US December PPI data to be released next Tuesday, and on Thursday, all eyes in the market will be on the "terrifying data" of retail sales.

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