Wall Street Confident in FOMC Rate Freeze [New York Stock Market Weekly Outlook]

January FOMC Scheduled for 28-29 (Local Time)

97% Probability of Rate Freeze Expected

The biggest event on the New York stock market this week (27-31) is the regular meeting of the Federal Open Market Committee (FOMC) of the U.S. central bank (Fed) scheduled for January 28-29. U.S. President Donald Trump recently emphasized in a video speech at the World Economic Forum (WEF) in Davos, Switzerland, "I will demand an immediate rate cut, and likewise, rates should be lowered worldwide. They should follow us down." This is putting pressure on the Fed to cut rates.

However, Wall Street is leaning towards the possibility that the Fed will freeze rates at this FOMC. This is because the U.S. inflation rate has not yet fallen to the Fed's target of 2%, and the U.S. economy is still showing strong performance.

The U.S. Department of Labor announced on the 15th (local time) that the U.S. Consumer Price Index (CPI) rose 2.9% year-on-year in December. This is the highest increase in five months since July last year (2.9%).

Moreover, there are concerns that if President Trump begins to impose tariffs in earnest, inflation in the U.S. could reignite due to rising import prices. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of a rate freeze in January is 97.9% in the federal funds rate futures market.

On the 30th, weekly initial jobless claims and the preliminary fourth-quarter Gross Domestic Product (GDP) growth rate will be announced. On the last trading day, the 31st, the December Personal Consumption Expenditures (PCE) and the January Chicago Purchasing Managers' Index (PMI) are scheduled to be released.

Four companies among the Magnificent 7 (M7) will announce their earnings. On the 28th, Boeing, General Motors (GM), and Starbucks will release their earnings. On the 29th, Tesla, Meta, and Microsoft are prepared. On the 30th, Apple, Intel, Visa, Mastercard, and UPS plan to announce their earnings.

New York = Park Shin-young, Correspondent nyusos@hankyung.com