Two CPI reports, two non-farm payrolls reports.
Those are the big numbers that Fed Chairman Jerome Powell highlighted between now and the September 20 FOMC decision. The market is pricing in just a 20% chance of a hike, reasoning that even if the data is warm, the Fed can wait until November. And by November, the market is optimistic that something will cool, with only a 40% chance of a hike priced in.
The overall tone from the Fed and Powell was data dependence but he did make a push to keep September in play and I wonder if more officials try to highlight that in ahead of the week ahead, then manage further commentary after the August 10 CPI report.
On net, the market isn't moving much but I see risks as tilted towards dollar strength but highly dependent on economic data. That begins with tomorrow's US reports on:
- Advance Q2 GDP (Atlanta Fed is at 2.4%, consensus is 1.8%)
- Durable goods orders
- Initial jobless claims
- Advance goods trade balance
For more of what's expected, see the economic calendar.
