United States: Powell cautiously awaited

Jerome Powell

This Wednesday, it is especially the ‘semi-annual’ testimony of monetary policy of the president of the Fed, Jerome Powell, which will hold the attention of investors.

Markets are watching for indications of possible tapering, reducing the Fed’s asset purchases currently lodged to $ 120 billion monthly. The situation remains quite delicate for the Fed, given the confirmation of the surge in inflation, which is nevertheless considered to be still transitory.

Mary Daly, the head of the San Francisco Fed, said yesterday that the rise in inflation was not surprising. She adds that it is appropriate to start discussing tapering, the reduction in the Fed’s asset purchases which currently reach $ 120 billion monthly. “We will be in a strong position to reduce (asset purchases) at the end of the year or early the following year,” Daly said. The leader also sees a strong economy until the fall.

Investors will also read the producer price index today (final demand – 2:30 p.m.; consensus + 0.6% compared to the previous month or + 0.5% excluding food and energy), the index the Atlanta Fed’s July inflation expectations (3% in June), the Energy Department’s weekly report on domestic oil stocks for the week ended July 9 (4:30 p.m.), or Fed Beige Book – summary of recent economic conditions by region (8 p.m.). Neel Kashkari, who heads the Minneapolis Fed, will also speak today.

Tomorrow Thursday, the weekly jobless claims will follow. The Philadelphia and New York Fed regional manufacturing indices for July will also be released. Import and export prices will be announced. The markets will also follow the figures for American industrial production. Powell will speak for the second day in a row Thursday. Charles Evans will also have his say.

The US inflation figures released yesterday were worrying: Thus, the US consumer price index for the month of June climbed 0.9% compared to the previous month, much more than expected since the consensus was + 0.5%. The adjusted indicator, excluding food and energy, also increased by 0.9% compared to the previous month, against 0.4% consensus. The CPI therefore rose 5.4% year-on-year, against 4.9% consensus. The adjusted CPI, excluding volatile elements, increased by 4.5% compared to last year, against 4% consensus … Thus, consumer prices in the United States posted their largest increase in 13 years !

Agree or not agree ? Let your opinion here with a comment !

Your email address will not be published. Required fields are marked *