Federal Reserve's Policy Meeting and Auto Workers Strike
What to Expect in the Week Ahead
In the upcoming week, the focus will be on Jerome Powell and the Federal Reserve as they make their next policy decision. The Fed is set to meet on September 19 and 20, with the policy decision scheduled for Wednesday at 2:00 p.m. ET, followed by a press conference with Powell at 2:30 p.m. ET. Investors are expecting the Fed to maintain its benchmark interest rate in the range of 5.25%-5.5%.
On the corporate front, FedEx is expected to report earnings on Wednesday. Meanwhile, the United Auto Workers strike that started on Friday is anticipated to impact production at Stellantis, GM, and Ford.
Market performance in the past week was mixed, influenced by rising energy prices and economic data surprises. However, these factors did not significantly alter expectations for unchanged interest rates.
As we move through mid-September, traditionally a challenging month for markets, the Nasdaq has declined by 2.3%, the S&P 500 is down 1.2%, and the Dow Jones Industrial Average has fallen 0.3%.
The key question for the Fed's meeting is not the September decision but rather the policy decisions later in the year. The Summary of Economic Projections (SEP), which includes forecasts for inflation, economic growth, and future interest rates, will also be released. Investors are particularly interested in whether the Fed's projection for the fed funds rate in 2023 will change, and if there will be future forecasts on rate cuts.
The United Auto Workers strike by Ford, GM, and Stellantis could have broader economic repercussions, potentially affecting GDP, the labor market, and the tech sector. This may influence the Fed's decision to keep rates steady.
Overall, the market has been relatively quiet lately, with low volatility. However, a surge in energy prices could impact earnings projections, especially for companies with significant oil-related costs. Investors will also be monitoring economic data releases throughout the week.
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