![]() ![]() Powell may be pressed on how far beyond neutral the Fed will have to go to get inflation lower. How far beyond neutral will the Fed have to go? Greg Daco, chief economist at EY Parthenon, said he senses that policymakers realize “there is no easy way out” of the current economic environment.īringing down inflation while preserving a strong labor market will be “very difficult, if not impossible,” Daco said, in a note forecasting a recession starting in the fall. Read: The Fed could get lucky or things might wrong “They know deep down in their bones that inflation is on them,” Gapen said, in an interview. Gapen thinks there will be a mild recession later this year, based on the Fed’s communication that the Fed believes that fighting inflation is their number one job. ![]() If pressed, Powell will acknowledge that a downturn in activity or a sharper rise in unemployment “cannot be ruled out.” economist at Bank of America Securities, thinks Powell will say that the Fed’s base case remains for a soft landing for the economy. economist at Morgan Stanley, thinks Powell will “deliver a message that leaves markets guessing as to whether the next move could be a step down to 50bp or a steady 75bp.” Will there be a recession? Has fallen below 3% from close to 3.5% at the last Fed policy meeting.Īs a result, Ellen Zentner, chief U.S. Read: Markets have been quick to price in a Fed pause, that might not work out The Fed doesn’t want the step-down to appear dovish, which might inadvertently trigger an unwanted easing of financial conditions, said Tim Duy, chief U.S. Related to September, markets will be listening carefully to see if Powell validates current market pricing that the Fed will slow the pace of tightening in September due to mounting concerns about the economy.įed watchers note that Powell said that he didn’t think 0.75 percentage point moves were ordinary.īut it is a tricky pivot. There will be two reports on consumer price inflation and two job reports before the meeting, so many economists think Powell won’t offer the same guidance. ![]() The Fed’s next policy decision is on Sept. Will Powell be explicit about the size of the upcoming move, as he did at the last two press conferences?Įconomists at Deutsche Bank think Powell will issue similar guidance, which is that Fed officials “will likely decide between a 50bp and a 75bp move in September.” What about September?įorward-looking markets are already debating whether the expected rate hike in September is a half percentage point move or another 0.75 percentage point hike. Eastern followed by Powell’s remarks to reporters at 2:30 p.m. The Fed will release a policy statement at 2 p.m. Here are four things that economists and investors will be listening to after the Fed meeting and at Fed Chairman Jerome Powell’s press conference. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |