Economists Yelena Shulyatyeva, Andrew Husby and Eliza Winger wrote that the Fed's decision-making meeting in June was very important. Chairman Jerome Powell officially launched the reduction discussion, and FOMC participants decisively adjusted the time of interest rate hike to 2023.
The latest news from the Federal Reserve shows that the inflation pain threshold of FOMC is lower than that implied by the previous "temporary inflation theory". Policy makers may say that policies need to take into account the severe surplus in the labour market, but their actions suggest that price inflation will not be allowed to go unchecked.
According to the latest trend of the Federal Reserve, some economic research institutions have advanced their forecast of raising interest rates to 2023. At the same time, the Fed's news of the downsizing is very much in line with the economic research institute's expectation that it will begin to reduce asset purchases early next year.
After Powell's post-conference press conference, both doves and hawks will have a chance to clarify the message: half of FOMC attendees are scheduled to speak next week.
There is relatively little economic data for the following week, with the main focus on Friday's May personal income and expenditure report. The data will provide information on the status of consumers' shift to service spending and the mid-quarter pass.Key information about the degree of acceleration of swelling pressure.
President Joe Biden signed a bill to make June a federal holiday, and most U.S. government employees will enjoy paid leave on June 18, but the new law will not affect next week's market schedule.
Monday, June 21
There is no significant release of US economic data.
Tuesday, June 22
Second-hand housing sales (10:00)
| BE prediction | Consensus prediction | Front value | |
|---|---|---|---|
| Second-hand housing sales (May) | 565万 | 572万 | 585万 |
| Ring ratio | -3.4% | -2.2% | -2.7% |
Second-hand housing sales will fall again in May as the decline in inventory affects sales. High house prices will dampen the enthusiasm of potential buyers.
Interest rates go up
Wednesday, June 23
Sales of new homes (10:00)
| BE prediction | Consensus prediction | Front value | |
|---|---|---|---|
| Sales of newly built homes (May) | 85万 | 87.5万 | 86.3万 |
| Ring ratio | -1.5% | 1.4% | -5.9% |
Sales of new homes have been volatile, but generally hovered at strong levels-the May figures will not be much different. The reopening of the economy will help the market, although it will limit demand due to reduced construction activity and scarcity of stocks due to supply and labour shortages. Housing starts increased in May, but building permits declined, so the momentum may not continue.
Thursday, June 24
Bank of England resolution (7: 00 a.m.)
| Consensus prediction | BE prediction | Front value | |
|---|---|---|---|
| bank rate | 0.1% | 0.1% | 0.1% |
| Asset purchase Program objectives | 895 billion pounds | 895 billion pounds | 895 billion pounds |
The Bank of England is expected to keep its policy unchanged in June. Data since May show that economic activity, labour market and inflation are higher than the central bank expected. It also shows that even with the increase in the number of COVID-19 infections and the government's decision to postpone the full unsealing of the economy by four weeks to July 19, the committee will maintain an optimistic tone.
First-time claims for unemployment benefits (8:30)
| BE prediction | Consensus prediction | Front value | |
|---|---|---|---|
| Number of people applying for unemployment benefits for the first time (week of 19 June) | 39万 | 38万 | 41.2万 |
Initial jobless claims will continue to decline as Americans become more willing to look for jobs when supplementary unemployment benefits expire in many states. Four states-Alaska, Iowa, Mississippi and Missouri-cut off federal aid on June 12th. Eight other states-Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming-chose to end on June 19.
Orders for durable goods (8:30)
| BE prediction | Consensus prediction | Front value | |
| Overall (May) | 2.2% | 3.0% | -1.3% |
| Excluding transport equipment | -0.4% | 0.8% | 1.0% |
The author believes that the significant recovery in durable goods orders and shipments during the recession will begin to lose momentum in the second half of 2021. Prior to this, the author believes that there will be strong growth in May, mainly in the area of transport equipment.
Pandemic push for computers and "other durable goods" will weaken
Third measurement of GDP in the first quarter (8:30)
| BE prediction | Consensus prediction | Front value | |
|---|---|---|---|
| GDP (annualized on a ring basis) | 6.4% | 6.4% | 6.4% |
Despite the downside risks to trade, the third estimate of GDP in the first quarter is unlikely to be different from previous data.
Friday, June 25
Personal income and expenditure (8:30)
| BE prediction | Consensus prediction | Front value | |
|---|---|---|---|
| Personal income (May) | -2.9% | -2.7% | -13.1% |
| Personal consumption | 0.8% | 0.3% | 0.5% |
| Core PCE deflator | 0.6% | 0.6% | 0.7% |
The personal income and expenditure report for May will show the extent to which Americans are trying to make up for what was missing during the pandemic. Although the latest retail sales report shows that consumption of goods fell last month, upcoming data may show that accelerated growth in the service sector has made up for the loss of spending on goods.
Shift from goods to services
Final value of University of Michigan Consumer confidence Index (10:00)
| BE prediction | Consensus prediction | Front value | |
|---|---|---|---|
| University of Michigan Consumer confidence Index (June) | 86.5 | 86.5 | 86.4 |
Pushing Qualcomm IncIn terms of inflation expectations, the memory of inflation may be as important as the surge in real prices. The recent rise is mainly concentrated in Americans over the age of 35, especially among those over 55, as shown in the chart below. If concerns about past periods of high inflation exaggerate the latest developments, they will not last as real CPI year-on-year figures fall.
Early June figures show that inflation expectations are lower over the next five to 10 years, in line with market expectations.
Long-term (5 to 10 years) inflation expectations by age
