US Pulse: Inflation Data Key for Data-Dependent Fed

ANZ Research expects the Fed to remain on hold in 2026 as headline inflation moderates and inflation expectations remain anchored. The FOMC remains data-dependent amidst an internal divide regarding the necessity of further rate hikes.

Key Takeaways

• 1.The Fed is expected to remain on hold throughout 2026 as inflation trends lower, supported by fading tariff effects and cooling shelter inflation.
• 2.FOMC members are evenly split on the future policy rate trajectory, maintaining a data-dependent stance based on evolving inflation risks.

Table of Contents

• Fed and inflation
• The week ahead
• The week that was
• Fed's reaction function and inflation trends
• Inflation outlook
• Inflation expectations
• Data pulse: the week ahead
• Data pulse: the week that was
• Important Notice

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