Investing.com-This week, investors need to pay close attention to the minutes of the Federal Reserve (Federal Reserve) meeting on Wednesday to understand the impact of soaring inflation on the path of future interest rates.
US President Biden (Joe Biden) is about to announce the nomination of the Fed chairman is also the focus of the market. Biden is expected to make a decision before the Thanksgiving holiday on Thursday.
On Wednesday, the United States will announce a series of economic data. This week, the Eurozone, the United Kingdom and the United States will also release PMI data, from which investors can understand the supply chain situation and the impact of inflation on corporate activities. At the same time, Black Friday kicked off the holiday shopping season this week.
Here are five major financial markets that need to be watched this week:
1.Fed will announce meeting minutes
On Wednesday, the Federal Reserve will announce November. At this meeting, the Fed stated that the U.S. economy is strong enough to begin to scale back the asset purchase plan introduced during the pandemic.
After the introduction of the asset purchase plan, the US economy continued to accelerate its recovery and employment accelerated, but inflation continued to soar. Fed Vice Chairman Richard Clarida (Richard Clarida) said on Friday that discussions should begin to accelerate the pace of reducing the scale of asset purchases in preparation for an early rate hike by the Fed.
Last Thursday, Chicago Fed President Charles Evans, known for his dovish stance, also showed that he was more open to raising interest rates next year than he was six months ago. In addition, Atlanta Fed President Raphael Bostic also expressed support for a rate hike in mid-2022.
The Fed will hold its next currency meeting in mid-December and will release its quarterly forecast. Investors can learn more about the changes in the positions of Fed policymakers from the forecast.
2.Biden will announce the nomination of the Fed chairman
The White House said last week that President Joe Biden may announce the Fed chairman’s nomination before Thanksgiving. The market needs to pay close attention to whether Fed Chairman Jerome Powell can be re-elected or whether the current Fed Governor Lael Brainard succeeds.
Analysts expect that the results of the nomination will trigger stock market volatility, especially if Brainard is nominated.
Powell’s current term will end in February next year, and he was appointed by then President Donald Trump in 2018. Brainard has served as a governor of the Federal Reserve since 2014 and is favored by progressive Democrats, who is generally regarded as more dovish than Powell.
If Brainard is nominated, the market may re-price the timing of future interest rate hikes, and a longer loading duration of low interest rates may cause US Treasury bonds to be sold due to rising inflation expectations.
3.The U.S. will release a lot of economic data
The United States will release a number of economic data on Wednesday. The focus will be on data and the Fed’s most popular inflation indicator. On Thursday, the U.S. market is closed for a holiday.
The data that will be released this week include data such as,,, and.
On Monday and Tuesday, the United States will also release PMI data for November, and analysts expect only moderate improvements.
4.MultinationalSMEsOncoming
Although the U.S. PMI is expected to rise slightly in November, the PMI of manufacturing and service industries in Japan may continue to decline.
The number of new infections continues to rise. Restrictions have been restarted in some parts of Europe. At the same time, soaring gasoline prices and tight global supply chains have exacerbated inflation.
The European Central Bank is under increasing pressure to tighten its easing policy. But the President of the European Central Bank, Christine Lagarde, still insists that tightening policies now may stifle the economic recovery.
At the same time, the Bank of England may become the world‘s first major central bank to raise interest rates since the outbreak. Investors and economists expect the Bank of England to raise interest rates at its monetary policy meeting on December 16.
5.Black Friday opening
This week, Black Friday will kick off against the backdrop of soaring inflation and insufficient supply.
Although some people worry that high inflation may erode consumer spending, the surge in October indicates that Americans started shopping very early to cope with supply shortages. Strong retail sales in the third quarter also boosted market confidence in holiday shopping performance.
Easterly Investment Partners portfolio manager Jessica Bemer told Reuters on Friday: “Based on the third-quarter earnings report, we believe that US consumption is strong.”
Last week, “We have been hearing retailers say that consumers will return to the store, enjoy the shopping experience, and prepare for the holiday. This makes sense and is confirmed in the financial report.”
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Compiler: Liu Chuan