Fed officials closely monitor economy data as rate cuts uncertain

Investors ponder economic outlook as U.S. Treasury yields decline

The relationship between yields and prices is inversely proportional, meaning that when yields decrease, prices increase. For instance, when the yield of a treasury bond decreases by a basis point, the price of the bond increases.

Fed officials are closely monitoring recent data and comments to determine their outlook on the economy. There is uncertainty surrounding when and how often the Fed will cut interest rates this year, as they have indicated that their decisions will depend on the state of the economy. Some policymakers believe that there may be fewer than the previously forecasted three rate cuts this year.

Recent data has shown that durable goods orders rose more than expected in February, while consumer confidence has declined in optimism about the economy. On Wednesday, Fed Governor Christopher Waller is expected to give remarks on his views on the economy. Thursday will see important data releases such as weekly initial jobless claims, the final reading of US GDP for the fourth quarter, and consumer sentiment insights.

The most anticipated data of the week is set to be released on Friday with personal consumption expenditures price index – which is considered by Fed as its preferred inflation measure – as well as personal income and spending figures. Since markets are closed for Good Friday, traders’ reactions to this data will have to wait until next week.

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