What better way to gauge how the Fed feels post-NFP than a bunch of FOMC-related events? Here’s what you need to watch out for this week.
Powell’s speeches and testimonies
The Fed head honcho will be busy under the spotlight with one scheduled speech AND two testimonies on tap.
Tomorrow at 8:45 am GMT he will deliver remarks in Boston where he’s expected to answer some audience questions.
The party won’t start until Wednesday at 10:00 am GMT, however, when Powell is set to testify in front of the House Financial Services Committee and then again the next day before the Senate Banking Committee.
After last Friday’s strong NFP release, traders will be looking for clues on the momentum of the Fed’s future interest rate cuts.
Are members planning on doing a one-and-done “insurance cut” to combat uncertainties before pausing, or will they wait for “crosscurrents” to do more damage before they make their next move?
FOMC meeting minutes (Jul 10, 2:00 pm GMT)
As widely expected, the Fed kept its rates steady for another month in June. What markets hardly expected was for members to open the door to future rate cuts just months after raising their rates.
For starters, the FOMC gang dropped the word “patient” in terms of approaching their policies. In fact, Powell shared that “some” officials now believe that the case for accommodation has “strengthened.”
How urgent are most of the members feeling, and what factors might prompt them to change their current policies? We might know more when the Fed publishes its meeting minutes.
One thing you should note is that the impact of the event might be muted especially if Powell already spills the most market-moving beans during his testimonies.
U.S. CPI (Jul 11, 8:30 am GMT)
Uncle Sam’s annualized inflation rate slipped to 1.8% in May, lower than the 2.0% five-month high seen in April and the 1.9% rate that analysts had expected.
Not surprisingly, the weak reading encouraged speculations that the Fed would be cutting its rates in the foreseeable future.
While the Fed will likely look closely at another inflation gauge (PCE), this week’s CPI release could still provide clues on how motivated the Fed will be in potentially cutting its rates in the next couple of months.
Market players see monthly prices steady in June, while its core version is expected to rise by 0.2% against the 0.1% uptick seen in May. Meanwhile, the annualized reading could cool down to 1.6% for the month.
Missed last week’s price action? Read USD’s price recap for July 1 – 5!