In the wake of Jerome Powell’s pushback against the prospect of a March interest rates cut – see our Fed meeting reaction here – the market is now only pricing around 9bp for that meeting, effectively a 37% probability of a cut, having been near enough 100% priced at the start of the year. Today’s data hasn’t shifted that at all, but there are some interesting stories. On the dovish side, that could be used to argue for a March cut, we see that fourth quarter productivity was stronger than expected at 3.2% and consequently unit labour cost growth was more benign, growing just 0.5%. This is a nice combination that ... (full story)