This Week's Macro Outlook: US Inflation Resilience + Tariff Uncertainty, Fed May Postpone Rate Cut to July

BlockBeats News, February 23rd: The U.S. macro trend has returned to the combination of "high inflation + longer-lasting high interest rates."

On Tuesday at 23:00, the U.S. December wholesale sales monthly rate, the U.S. February Conference Board Consumer Confidence Index, and the U.S. February Richmond Fed Manufacturing Index were released;

After the U.S. stock market closes on Wednesday, NVIDIA will release its financial report;

On Thursday at 21:30, the U.S. initial jobless claims for the week ending February 21st will be announced;

On Friday at 22:45, the U.S. February Chicago PMI will be released.

The latest data shows that the overall GDP growth rate in the fourth quarter of 2025 in the U.S. was lower than expected, but the core GDP still grew by 2.4% year-on-year, indicating ongoing economic resilience. The core PCE for December increased by 0.4% month-on-month and reached 3% year-on-year, the largest increase in nearly a year, with the Super Core PCE reaching 3.3%, reinforcing the signal of sticky inflation.

As a result, the interest rate market has largely abandoned the expectation of a rate cut in the first half of the year. According to LSEG data, traders are currently fully pricing in two 25-basis-point rate cuts in 2026, but the first rate cut has been postponed to July. Some institutions have even warned that the risk of only one rate cut for the whole year is increasing.

This week, the focus will be on the U.S. January PPI data. The market expects a 0.3% month-on-month increase in PPI, with a year-on-year decrease from the previous value of 3.0% to 2.8%. If producer-end inflation remains resilient, it will further limit the Fed's policy shift space.

Several Fed officials have already sent hawkish signals. Chicago Fed President Evans said that if inflation remains at or above 3%, the current interest rate level is "not high"; Governor Brainard stated that she does not support a rate cut until it is confirmed that inflation is continuing to fall; meeting minutes also show that some officials are open to raising rates when necessary.

Overall, although U.S. economic growth has slowed down, it has not stalled, inflation remains stubborn, and there are variables in fiscal and trade policies. Against this backdrop, short-term market volatility may be more driven by data and policy expectations, while the Fed's policy focus will continue to revolve around "maintaining restrictive rates for a longer period of time."