Things to Watch This Week

  • Fed Meeting

On Wednesday, the next U.S. Federal Reserve meeting will take place in which policymakers will decide whether the U.S. economy is already strong enough to gradually scale back the QE program.

Official U.S. economic data point to a recovery in the economy, but rising inflation has many calling for a quick change in interest rate policy.

  • U.S. Federal Reserve Chairman

If President Joe Biden appoints Brainard as the new Fed chief, many analysts expect high volatility on the stock markets.

President Joe Biden is leaning toward deciding before Thanksgiving whether to keep Fed Chairman Jerome Powell or promote current Fed Governor Lael Brainard.

If Brainard is appointed, we will have to watch closely what monetary policy Brainard will adopt. If interest rates fall to zero or below, many experts expect a sell-off in U.S. government bonds. In addition, inflation could rise even further if the interest rate policy is maintained.

  • U.S. Economic Data

On Wednesday, the U.S. will publish the next economic data. The most important items will be the personal income and spending figures. This will include the core PCE price index, one of the Fed’s key gauges of inflation.

Economic data also includes revisions to third quarter GDP, preliminary unemployment benefits, durable goods orders, new home sales, and consumer confidence.

Reports on existing home sales and PMI data for November will be released on Monday and Tuesday.

  • PMI Data

Experts expect a slight increase in business activity with regard to U.S. PMI data. In the EU and UK, a slow down in production and services is expected.

The rising number of COVID infections has led to renewed restrictions in some parts of Europe.

The European Central Bank is coming under increasing pressure. It must tighten its loose monetary policy to counteract the effects on households’ declining purchasing power.

Meanwhile, the Bank of England became the first major central bank in the world to raise interest rates since the pandemic began.

  • Black Friday

Friday marks the start of the holiday shopping season amid rising inflation and supply shortages.

High inflation may affect consumer spending. However, retail sales rose in October. This shows that Americans are starting to stock up to avoid supply shortages. Strong retail sales results in the third quarter provided some positive signs for the holiday shopping season.

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