While a clutch of economic data releases this week will give perspective on the shape of the economy, Jerome Powell’s Federal Reserve chairman confirmation hearing will be followed by investors and traders as he explains how he would handle an economic crisis and why he thinks inflation remains stubbornly below the Fed’s desired 2 percent range, Prudential’s Chief Market Strategist Quincy Krosby said Monday in her weekly “Connecting the Dots” outlook.
Outgoing Fed Chair Janet Yellen’s congressional testimony before the Joint Economic Committee will include her comments on the state of the U.S. economy, as well as her opinions on the “inflation question,” Krosby said.
“It’s going to be an interesting week,” she said. “Inflation has become an increasingly important theme for economists as well as traders and investors. Why has inflation remained below the 2 percent level? Is it dormant, is it beginning to creep higher, or does it portend a serious economic slowdown?”
The tax reform process continues in the Senate as the administration seeks to garner the necessary support from the Republican side of the aisle.
“Given the importance of tax reform for the president’s agenda, more Republican senators need to be brought on board before the vote,” she said. “This will entail even more horse-trading on Capitol Hill.”
OPEC’s meeting in Vienna is the biggest potential marker mover for oil prices with the focus squarely on production cuts, she said.
Data releases this week include several housing-related reports; vehicle sales; the second estimate for third-quarter gross domestic product; the Fed’s Beige Book; personal income and outlays; and the Institute for Supply Management (ISM) manufacturing index.
This week’s data releases:
- Monday: New home sales report
- Tuesday: Case-Shiller home price index; consumer confidence report
- Wednesday: Third-quarter GDP estimate; pending home sales; Fed Beige Book
- Thursday: Personal income and outlays
- Friday: ISM manufacturing index; construction spending; motor vehicle sales
The views and opinions are those of the author at the time of publication and are subject to change at any time due to market or economic conditions. This is solely for informational purposes. This is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.