Core Insights - FS Bancorp, Inc. announced the appointment of Matthew Mullet, CEO of 1st Security Bank, to the Seattle Branch Board of Directors for the Federal Reserve Bank of San Francisco [1][3] Group 1: Company Overview - 1st Security Bank of Washington provides loan and deposit services through its twenty-seven branches located in Washington and Oregon, offering mortgage services, commercial lending, and treasury management services [6] Group 2: Leadership Appointment - Matthew Mullet expressed honor in being appointed to the SF Fed's Seattle Branch Board, emphasizing the importance of influencing monetary policy for community banks and their customers [5] - Mullet has been with 1st Security Bank since 2011, previously serving as Chief Financial Officer before becoming CEO in 2025 [5]

Core Insights - Norway's central bank is committed to reducing consumer price inflation to its 2% target, indicating a cautious stance on further interest rate reductions [1] - The central bank began an easing cycle in 2025, cutting its policy rate by 50 basis points to 4.0%, with plans to gradually reduce borrowing costs towards 2028 as inflation is expected to decline [1] - Unexpected acceleration in Norway's annual core inflation to 3.4% in January from 3.1% in December may lead to a reassessment of the central bank's rate cut plans [1] Economic Outlook - The Norwegian economy is expected to experience a moderate upturn, with household purchasing power anticipated to grow [1] - The central bank governor emphasized the unpredictability of economic outlooks, stating that no promises can be made regarding the policy rate [1] Monetary Policy Communication - Norges Bank plans to provide more insights into its monetary policy committee's discussions this year, aiming for greater transparency without attributing specific views to individual members [1] - The governor supports a Finance Ministry initiative for periodic reviews of the central bank's mandate but cautions against including broader goals like wealth distribution or climate change in monetary policy [1] Sovereign Wealth Fund - Norway's $2.2 trillion sovereign wealth fund faces conflicting expectations regarding responsible investments both domestically and internationally [1]

Economic Data - US stock index futures rose modestly following a stronger-than-expected labor market report, with payroll growth of 130,000 and a decline in the unemployment rate to 4.3% from 4.4% [1][1] - The probability of the Federal Reserve holding interest rates steady increased to nearly 40% from 24.8% a day earlier, although at least one rate reduction is still anticipated in June [1][1] Corporate Earnings - Corporate earnings are a key driver of stock movements, with companies like Restaurant Brands, Birkenstock, Howmet Aerospace, and Exelon reporting results [1][1] - Software stocks faced continued pressure, with AppLovin shares dropping 5.6% and Cisco Systems falling 8% in premarket trading due to disappointing guidance [1][1] Trade Policy and Geopolitical Developments - Reports suggest that the US and China may extend their trade truce for up to a year, with a meeting between Presidents Trump and Xi Jinping expected in early April [1][1] - The US House of Representatives voted to disapprove tariffs on Canada, indicating a shift in trade policy [1][1] - Applied Materials shares slipped 1% following a $252 million settlement related to illegal exports of chipmaking equipment to China [1][1]

Core Insights - India is set to release new inflation figures based on a revised consumer price index (CPI), which may indicate heightened price pressures in the economy, potentially leading the central bank to maintain current interest rates [1][4] CPI Overhaul - The new CPI, scheduled for release on Thursday, will reflect updated spending patterns and will include data for 2025, facilitating easier comparisons [2] - The weighting of volatile items like food has been reduced to approximately 36.8% from nearly 50%, while new categories such as rural housing rentals and online shopping have been introduced [3] - The base year for the CPI has been updated from 2012 to 2024, which may result in an inflation reading of about 2.77% for January, compared to 1.33% in December based on the previous series [3] Central Bank Implications - Although inflation remains below the Reserve Bank of India's (RBI) target of 4%, the new figures could lead to a pause in rate cuts and an increase in bond yields [4] - The RBI's inflation forecasting model has faced scrutiny due to past overestimations, prompting discussions on whether to target an inflation measure that excludes food to reduce volatility [5] Market Reactions - The new CPI series is expected to enhance the effectiveness of the RBI's monetary policy and improve the speed of transmission [6] - Financial market participants are closely monitoring the CPI changes, as a higher inflation trajectory could keep borrowing costs elevated, affecting bond yields and equity valuations [6] Economic Context - The revised CPI aims to better reflect India's economic reality, considering the shift in consumer spending towards services and housing as incomes rise [7] - Core inflation, which excludes food and fuel, will see its weight increase to nearly 58% from 47.3%, making it more responsive to monetary policy [8] Future Data Releases - The government plans to publish GDP data on February 27 based on the new consumer spending patterns, which may show a significant upward revision in the economy's size, potentially positioning India to surpass Japan as the world's fourth-largest economy [9] Index Composition Changes - The CPI overhaul will replace outdated items with modern expenditures, including airfares and e-commerce sales, while also incorporating electricity prices and rural housing costs [10] - Free food items from government welfare programs will be excluded from the new CPI, which will also provide more detailed data potentially down to the item level [11] Market Expectations - The bond market is currently facing record debt supply, with benchmark 10-year bond yields reaching their highest level in over a year following the central bank's decision to hold rates [11] - Market expectations indicate a slight upward bias in the new CPI of around 30-50 basis points, with the RBI anticipated to maintain a long hold stance focused on proactive liquidity management [12]

Core Insights - The overhaul of the Consumer Price Index (CPI) reflects significant changes in spending patterns, with the weighting of volatile items like food reduced to approximately 36.8% from nearly 50% and new categories such as rural housing rentals and online shopping added [1][9] - The base year for the CPI has been updated from 2012 to 2024, which is expected to provide a more accurate representation of current economic conditions [1][9] - The median estimate from economists suggests that the January inflation reading could rise to about 2.77%, compared to 1.33% in December based on the previous CPI series [2][10] Monetary Policy Implications - The revised CPI is anticipated to enhance the effectiveness of the Reserve Bank of India's (RBI) monetary policy actions, potentially minimizing past policy errors associated with the older series [8][10] - The weight of core inflation, which excludes food and fuel, will increase to nearly 58% from 47.3%, making it more responsive to monetary policy [10] - Financial market participants are closely monitoring these changes, as a higher inflation trajectory may lead to elevated borrowing costs, influencing bond yields and equity valuations [8][10] Economic Context - The new CPI series is expected to better reflect India's economic reality, particularly as consumer spending has rapidly expanded, with rising incomes leading to decreased spending on food and increased spending on services and housing [9][10] - The government plans to publish GDP data based on the new consumer spending patterns, which may indicate a significant upward revision in the size of the economy, potentially positioning India to surpass Japan as the world's fourth-largest economy [11][12] - The CPI overhaul will replace outdated items in the index with more relevant categories, including airfares and e-commerce sales, while excluding free food items from government welfare programs [12][13]

Summary of Key Points Core Viewpoint - The January jobs report revealed that 130,000 jobs were added, significantly exceeding the economist estimate of 65,000, while the unemployment rate decreased to 4.3% from 4.4% [6][10][9]. Group 1: Job Market Overview - The average estimate for non-farm payrolls was 65,000, which reflects an increase from December's 50,000 [2]. - The unemployment rate was predicted to remain steady at 4.4%, but it actually decreased to 4.3% [6][10]. - Average hourly earnings were expected to remain steady with a gain of 0.3% [2]. Group 2: Benchmark Revisions - The Bureau of Labor Statistics (BLS) revised previous job counts, indicating an overcount of 862,000 jobs from April 2024 to March 2025, down from an earlier estimate of 911,000 [4][7]. - This revision highlights the challenges in accurately measuring job growth due to varying survey methodologies [5][41]. Group 3: Sector Performance - The healthcare sector was the largest contributor, adding 82,000 jobs, with significant gains in ambulatory services, hospitals, and residential healthcare [54]. - Social assistance added 42,000 jobs, primarily from individual and family services [55]. - The construction sector saw a gain of 33,000 jobs, with specialty trade jobs contributing 25,000 [56]. Group 4: Job Losses - The federal government experienced a loss of 34,000 jobs, continuing a trend that has seen a total decline of 327,000 jobs since October 2024 [56]. - The financial activities sector lost 22,000 jobs, with a total decline of nearly 50,000 jobs since May 2025 [57]. Group 5: Market Reaction - Following the jobs report, stock futures rose, indicating a positive market reaction, particularly in the Russell 2000 and S&P 500 indices [46][51]. - Treasury yields increased, reflecting market adjustments to the stronger-than-expected job growth [47][48].

Summary of PBOC Q4 Monetary Policy Report Industry Overview - The report pertains to the monetary policy of the People's Bank of China (PBOC) and its implications for the Chinese economy. Key Points 1. **Monetary Policy Stance** The PBOC maintained a "moderately loose" policy stance in its Q4 monetary policy report, indicating a measured easing approach. The focus remains on supporting stable economic growth and facilitating a reasonable recovery in prices [2][1] 2. **Policy Implementation** The PBOC emphasized the need to carefully calibrate the strength, pace, and timing of policy implementation. This reflects a cautious approach to broad-based credit easing, with structural monetary policy being prioritized [2][1] 3. **Interest Rate Management** The PBOC highlighted the importance of guiding short-term money market rates around the policy rate, suggesting a narrowing of the interest rate corridor from 205 basis points to 70 basis points. This indicates a shift towards tighter corridor management [3][1] 4. **Effective Lending Rates** Effective lending rates decreased further from Q3 to Q4, with the PBOC changing its language from "further reducing overall financing costs" to "keeping overall financing costs at a low level," indicating a more measured approach amid concerns over banks' net interest margins [3][1] 5. **Liquidity Management** The PBOC is utilizing a broad range of monetary policy tools to provide liquidity, increasingly relying on Medium-term Lending Facility (MLF) loans and outright repos. Regular trading of Central Government Bonds (CGB) is planned, with operations adjusted flexibly based on market developments [7][1] 6. **Fiscal-Monetary Policy Coordination** The PBOC outlined three main channels for coordination: maintaining ample liquidity for government bond issuance, coordinating re-lending programs with fiscal interest subsidies, and sharing credit risks through guarantees. The emphasis is on relending programs as a key channel for targeted credit support [8][1] 7. **Outstanding Relending Programs** Outstanding relending programs for key sectors remained stable at around RMB 3.8 trillion through the first three quarters of 2025, rising to approximately RMB 4.1 trillion in Q4. This indicates a stable approach to credit supply in priority areas [8][1] 8. **Priority Areas for Finance** The PBOC identified five priority areas for financial support: technological innovation, green transition, inclusive finance, elderly care, and digital economy [10][1] Additional Insights - The PBOC's cautious approach to broad-based credit easing suggests that fiscal policy will continue to be the primary lever for growth support, rather than relying solely on monetary policy [2][1] - The shift in focus from DR007 to DR001 indicates a potential change in the PBOC's strategy for managing short-term interest rates [3][1]

Economic Overview - Chinese consumers are experiencing "luxury shame," reminiscent of the U.S. during the 2008-09 financial crisis, indicating a shift in consumer sentiment [1] - The consumer price index (CPI) rose by 0.2% year-on-year in January, below the expected 0.4% increase, following a 0.8% growth in December, which was the highest in nearly three years [2] - The producer price index (PPI) declined by 1.4% year-on-year, better than the expected 1.5% drop, and moderated from a 1.9% decline in December, indicating persistent deflationary pressures [3] Economic Growth and Challenges - China's economy grew by 5% last year, aligning with Beijing's official target, supported by resilient export growth to non-U.S. markets [4] - The country continues to face deflationary pressures post-pandemic, influenced by a prolonged property downturn and uncertain job-market prospects [4] - Authorities are addressing price wars across industries due to overcapacity, which has led to a surplus of goods and forced companies to reduce prices [4] Policy Responses - Top policymakers are expected to announce economic targets for the year at an upcoming parliamentary meeting [5] - The People's Bank of China has reiterated its commitment to "appropriately loose" monetary policies to support the economy and guide prices towards a reasonable recovery [5]

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY) recovered from a one-week low, finishing up by 0.01% due to hawkish comments from Federal Reserve officials [1] - The US Q4 employment cost index rose by 0.7% quarter-over-quarter, which was weaker than the expected 0.8% and marked the smallest increase in 4.5 years [3] - US December retail sales were unchanged month-over-month, falling short of expectations of a 0.4% increase, with retail sales excluding autos also unchanged [3] Group 2: Federal Reserve Commentary - Cleveland Fed President Beth Hammack indicated a preference for patience regarding interest rate adjustments, suggesting the Fed could remain on hold for an extended period [4] - Dallas Fed President Lorie Logan stated that significant weakness in the US labor market would be necessary for her to support further interest rate cuts [4] Group 3: Dollar Weakness and Market Sentiment - The dollar faced pressure as foreign investors withdrew capital from the US, influenced by a growing budget deficit and political polarization [5] - The swaps market is pricing in a 20% chance of a 25 basis point rate cut at the upcoming policy meeting on March 17-18 [5] - The dollar is expected to experience underlying weakness, with projections indicating a potential 50 basis point rate cut by the FOMC in 2026 [6]

Cleveland Fed President Beth Hammack said the Federal Reserve can err on the side of patience as it assesses the impact of recent rate reductions. ...