Home Business 5 factors investors must watch this week: Who will be the next Fed chairman? by Investing.com

5 factors investors must watch this week: Who will be the next Fed chairman? by Investing.com

by news dir
© Reuters

by Noreen Burke

Investing.com — Investors will be very keen on the minutes of the central bank’s meeting on Wednesday. to look for new insights into the impact of rising inflation on the path of future interest rates. Markets are still awaiting announcements from President Joe Biden about choosing a new Federal Reserve next term. A possible decision is expected before the Thanksgiving holiday on Thursday. US economic data surges on Wednesday before the long holiday, while PMI data outside the eurozone. united kingdom and the United States during the week will outline the impact of supply chain issues and inflation on business activities. Meanwhile, Black Friday has kicked off the holiday shopping period. Amid concerns that consumers may tighten their belts Here’s what you need to know to get the week started.

1. Fed meeting

On Wednesday, the Fed will release minutes of its November meeting. which policy makers decide that the US economy Strong enough to start scaling up asset purchase projects in the era of the pandemic. To promote recovery or not?

since then The economic recovery continued to accelerate. With rising employment and steadily rising inflation, Federal Reserve Vice-President Richard Clarida called for discussions on interest rate hikes last week to help keep interest rates low. Let the Fed raise interest rates faster.

Last Thursday, Chicago Fed Chairman Charles Evans said he was “more open” to raising interest rates next year than he had thought six months ago. Atlanta Federal Reserve Chairman Tick has signaled his support for a mid-2022 interest rate hike.

The Fed is scheduled to release new quarterly forecasts. After the next meeting in mid-December and perhaps better estimate the numbers on the changing perspectives of policymakers.

2. Biden’s selection of the next central bank president

The White House revealed last week that President Joe Biden tends to decide before Thanksgiving to give Jerome. Powell remains Fed chairman for another term or Leel Bernard is next Fed chairman.

Analysts expected the stock market to fluctuate during the announcement. Especially if Biden chooses Leil Bernard.

Powell, whose term ends in February next year. Appointed in 2018 by then-President Donald Trump, Bernard, who has been on the Fed’s board since 2014, has the backing of progressive Democrats and has been criticized. It’s seen as more dovish than Powell.

If Brainard is appointed The market may adjust prices at the time of future interest rate hikes. Meanwhile, a prolonged downward trend in interest rates could see a sell-off in US bonds. This was prompted by higher inflation expectations.

3. Data from the United States

The US will release economic data on Wednesday before the market closes on Thursday. Highlights will be on the figures of personal income and spending. This includes the Core PCE price index, which is thought to be the Fed’s favorite gauge of inflation.

The economic calendar also shows data on Q3 GDP, preliminary unemployment benefits. durable goods orders new home sales and consumer confidence

Existing home sales reports and November PMI data. This is expected to change slightly before release on Monday and Tuesday respectively.

4. PMIs

Although the November PMI data from the US It is expected to show a slight increase in business activity. Similar surveys from the eurozone and the UK expect activity in the manufacturing and services sectors to slow.

The increase in the number of infections has led to the renewal of lockdowns in some parts of Europe. while the rising oil price led to inflation. together with the global supply chain crisis

The European Central Bank is under increasing pressure to tighten particularly loose monetary policy to offset the impact on households’ spending power, but ECB President Christine Lagarde has pushed back, citing the policy that the ECB’s “unstable monetary policy” is declining. The current austerity could weaken the economic recovery.

Meanwhile, the Bank of England (BoE) appears to be the world’s first large central bank to raise interest rates since the start of the pandemic. Investors and economists expect a rate hike at the December 16 meeting.

5. Black Friday

The holiday shopping season kicks off in earnest on Friday. Amid rising inflation and supply shortages

There are concerns that high inflation could affect consumer spending. But retail sales increased in October. It indicates that Americans started shopping early to overcome supply shortages. Strong third-quarter retail results added some positive signals for holiday shopping.

“Based on third-quarter results, one of the trends we are seeing is the strength of US consumers,” Jessica Bemer, portfolio manager at Easterly Investment Partners, told Reuters on Friday.

“We’ve been hearing all week from retailers talking about consumers returning to the store. Enjoy shopping experience and get ready for the holidays It makes sense, but it’s actually proven during the profitable season.”

— Information from Reuters.

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