In addition to the Big Three of the Federal Reserve Bank of England, the Bank of England and the Bank of Japan, the central banks of Indonesia, Sweden, Hungary, Brazil, Taiwan, Switzerland, Norway, the Philippines, Turkey and South Africa will formulate policies. This week’s price. Most central banks are expected to be on the putt, but consensus predicts that Hungary, Brazil and Norway will raise interest rates. Slowing down bond purchases, known as tapering, is another way for central banks to reduce economic stimulus. The fate of asset purchases is currently focused in the United States, United Kingdom, and Japan, as tapering is usually done before rate hikes.
The Federal Reserve Board (FRB) will not make changes to the policy rate on Wednesday, so investors will focus on the timing of tapering and the first rate hike. The Fed also provides new economic forecasts, including for the first time in 2024. The updated dot plot carefully monitors changes in expectations for the timing of the first rate hike. Equities should be seen as negative in the 2022 median rise, as the Fed will soon remove the stimulus and become sensitive to concerns that it will hinder economic growth. Given Powell’s comments at Jackson Hall, it seems that most Federal Reserve Boards are planning to start raising rates in 2023, following his leadership. Rising inflation could raise it in 2022, but Powell could focus on his view that price pressures are temporary. The Fed still needs to preview the taper, but the official announcement seems likely to come in November. Estimates of GDP growth in 2021 have been lowered and the Fed can remain on the sidelines for now. Many economic measures, including retail sales, have exceeded their pre-pandemic peak. Still, the downside employment gap should be sufficient for the Fed to wait for the official tapering announcement. In addition, delta variant infections continue to pose downside risks to the global and US economies.
The Bank of England (BOE) is more split than the Fed, but could remain on hold for this meeting. The Bank of Japan’s policy should be maintained as the Bank of Japan needs to lower its forecast for 2021 GDP growth due to the impact of the Delta infection in Asia. Super adjustment for the foreseeable future. In addition, Japan’s Consumer Price Index (CPI) has not been positive since August 2020 and should continue to streak when measurements are reported this August.
Covid infections continue to increase in the United States and many other countries, but the decline in rate of change probably indicates that the situation is beginning to improve. Britain’s infection momentum seems to have peaked so far. Recently, the rate of increase in US Covid cases has only slowed down after 11 consecutive weekly cases, but unfortunately recovered last week. Although the number of infections is relatively high in Japan, the peak momentum was in late August and continues to improve.
Data reported last week showed US consumers a positive surprise in August, with retail sales up 0.7% month-on-month, despite expectations of increased and decreased Covid infections. Face-to-face service spending was, as expected, constrained by the Delta variant, but commodity spending boosted headline growth. August restaurant and bar sales were flat month-on-month after rapid growth following vaccine distribution. Retail sales results were strong, even though supply chain issues continued to plague automotive sales. Non-store sales, including online purchases, could have increased by 5.9% month-on-month, benefiting from Covid’s reduced consumer liquidity. Second-quarter US household wealth, reported Thursday, is almost certain to reach record highs due to rising stock prices and home prices. This positive development helps explain the resilient spending of consumers, despite the slow recovery of work from Covid.
Globally, US, Eurozone, UK, and Japan Purchasing Manager Index (PMI) measurements are interesting for measuring the strength of economic growth and resistance from delta variant infections. Congress will continue to negotiate large taxes and spending bills with current budget authorities to avoid the impending debt cap in October. Many of the tax and spending bills can take to complete in the fourth quarter, but the intended actions and warnings that the US could default during debt cap negotiations are noise and volatility in the market. May be added.