Mid-session market 01/31: Market rally ahead of FED rate decision

US labor costs in Q4 rose only slightly 1.0% QoQ, lower than the +1.1% forecast and down from +1.2% in Q3. Although the difference is minor, it is enough to cool the market ahead of tomorrow's extremely important Federal Reserve rate decision, where most investors expect the FOMC to shift from its long-standing hawkish stance and deliver just a 0.25% hike.

Although the labor cost increase remains at a record 5.07% YoY, average hourly wages for private sector workers continue on a downward trend, which will help shape FOMC members' views on the inflation trajectory.