Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Tuesday sees a day of largely second tier data with the Fed's policy outcome set to be the highlight, although final services PMI data in the UK and US will be closely watched.
Eurozone unemployment and US factory orders are also set for release.
FOMC set for taper (1800BST)
The Federal Reserve at its meeting Wednesday will start a rapid wind-down of its pandemic-era asset purchase program, beginning the countdown to potential interest rate hikes next year amid the growing risk that high inflation won't soon subside, our Washington DC bureau note.
Having notched substantial progress toward a full labor market recovery, the FOMC is expected to announce a tapering of net purchases of Treasuries by USD10 billion a month and mortgage securities by USD5 billion a month, ending the USD120 billion monthly QE program by mid-2022.
Tapering will continue on auto-pilot as long as the economy evolves in line with the Fed's outlook, the FOMC is expected to say, but the bar will be high for altering course. Markets are pricing in more than two rate hikes next year, but the order of the Fed's exit plans may prevent rate rises from moving much earlier into 2022, former staffers told MNI.
At this week's meeting, Chair Jay Powell is also likely to deliver a more hawkish message on inflation, noting that supply bottlenecks and worker shortages have not eased as the Fed had earlier expected.
Among the speakers Wednesday are Bank of Canada Deputy Governor Gravelle and Bank of England Governor Bank of England Andrew Bailey. Bailey is set to address the COP26 conference on net zero and is unlikely to address monetary policy a day ahead of the MPC policy decision.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.