Market Lights – Powell goes on
As expected, the FOMC voted unanimously to raise the target range for the Fed funds rate by 75 basis points, to 3.00-3.25%.
Market Overview
FED
The Federal Reserve announced a third consecutive 75 basis point rate hike yesterday at its September meeting to fight inflation. A three-quarter point rise was highly expected.
US CPI
This week’s main focus is on the US Consumer Price Index (CPI) in August, the last significant figure for the US economy ahead of the Federal Reserve meeting on September 20-21.
ECB
The Governing Council raised the three key ECB interest rates by 75 basis points at its September 2022 meeting, from a 50 bps hike in July.
Nonfarm payroll
The latest official data on employment to assess the labor market situation ahead of the Fed’s September 20-21 meeting.
Euro area PMI
All eyes are on the Purchasing Managers’ Index (PMI), a good indicator of the economic condition amidst a situation where demand is weakening and inflation is skyrocketing.
UK Economy
The cost of living crisis in the UK is making itself felt more and more, and some experts have warned that recession could come sooner than expected. Recent data has shown a further weakening of the British economy.
US CPI
All eyes on the US Consumer Price Index. According to the New York Fed survey of consumer expectations in July, Americans expect inflation to decline to 6.2% over the next year, from 6.8% in the June survey result, and to 3.2% over the next three years, from 3.6%.
FED
Last week the focus was on the ECB raising its three key interest rates by 50 basis points. This week it’s the Federal Reserve’s turn. Days prior to the Fed’s policy statement, markets were pricing in another 75 basis point increase in the benchmark rate, same as at the June meeting.
ECB
Europe is in a pressing situation. Inflation is running high as the war in Ukraine persist, exacerbating the rise in prices, especially energy and food. CPI in the euro area increased to an all-time high of 8.6% in June 2022.
