• Market rate expectations remains de-coupled from Fed language.
• US Services PMI and service provider inflation remain elevated.
• Markets left to chew on rate-cut potential with little high-impact data remaining.

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US equity markets saw red on Monday, driven to early declines after Federal Reserve (Fed) Chairman Jerome Powell dashed broad-market rate cut hopes on the rocks of reality even further after the central bank head made a rare mainstream media appearance during an interview with 60 Minutes early Monday. US data further pinned rate cut expectations to the floorboards as US Services Purchasing Managers’ Index (PMI) figures show a four-month uptick in activity, while services providers saw an uptick in inflation as prices rise on economic activity.

Fed Chairman Jerome Powell chilled market rate cut hopes even further during an interview with ‘60 Minutes’, noting that the “job’s not quite done” on inflation, with the US central bank head striking a cautious tone an reiterating recent warnings that market expectations for rate cuts have outrun what the Fed is both willing and able to deliver.

US economic data further complicated matters for rate-cut shoppers after January’s US ISM Services PMI ticked into a four-month high of 53.4, clearing the forecast 52.0 and vaulting over the previous month’s 50.5 (revised from 50.6). US ISM Services Prices Paid also ripped higher in January, with the index climbing to 64.0 compared to the previous month’s 56.7 (revised from 57.4)