Morning View
The Federal Reserve minutes released yesterday provide further insight into the decision to pause rate cuts
International
In the United States, yesterday the Federal Reserve (Fed) published the minutes of last month's monetary policy meeting. It had been decided not to change the benchmark interest rate, following three cuts at previous meetings. The most notable comment was the willingness of several Committee members to adopt a two-way description of the future direction of interest rates; this would imply that, if inflation remains above target, the possibility of upward adjustments to the target range for the benchmark rate cannot be ruled out. We note that the current rate remains in the 3.50%-3.75% range.
In terms of equities, the main US stock indices advanced yesterday. The S&P 500 rose +0.6%, while the Nasdaq rose +0.8% and the Dow Jones rose +0.3%. So far this year, the indices have accumulated variations of +0.5%, -2.1% and +3.3%, respectively.
Meanwhile, the US Treasury bond yield curve widened. The 1-year bond yield rose slightly from 3.47% to 3.48%, while the 3-year bond yield rose from 3.46% to 3.50%. The 10-year bond yield moved in the same direction, from 4.06% to 4.08%.
Source: PUENTE Hnos, Bloomberg
U.S. stock indexes are trading flat, awaiting PCE inflation data
International
In the United States, the major U.S. stock indexes remained largely unchanged on Tuesday, similar to Monday's performance. The S&P 500, Nasdaq, and Dow Jones each advanced +0.1%, with the S&P 500 unchanged from its 2025 close, while the Nasdaq has fallen -2.9% this year and the Dow Jones has risen +3.1%.
This week, the focus will be mainly on the release of December's PCE inflation—an indicator used by the Fed for monetary policy decisions—with an estimated year-on-year increase of +3.0% in the core measurement, and the first estimate of fourth-quarter GDP, for which annualized growth of +2.8% is forecast.
Meanwhile, the US Treasury bond yield curve steepened slightly. The 1-year bond maintained its yield at 3.47%, while the 3-year bond rose from 3.46% to 3.48%. The 10-year bond yield rose slightly from 4.06% to 4.07%.
Source: PUENTE Hnos, Bloomberg
