The US Federal Reserve has decided to keep interest rates steady in response to surprising inflation data for August. This comes after the central bank had previously raised borrowing costs by 525 basis points since March 2022. Federal Reserve Chair Jerome Powell had suggested that further rate hikes might be necessary to curb inflation, but the recent unexpected data has compelled the Fed to maintain its current course for now.
In the upcoming week, several key economic reports will be released, including updates on housing starts, initial jobless claims, the US current account deficit, crude oil inventories, and the latest purchasing manager indexes for manufacturing and services. Additionally, various companies, such as Stitch Fix, AutoZone, Steelcase, and FedEx, will be reporting their earnings.
Oracle is planning to hold a four-day CloudWorld event in Las Vegas, while Microsoft will host an event in New York City to provide details on new hardware products and the latest advancements in artificial intelligence.
Aside from these developments, several central banks are due to release their monetary policy decisions next week, including the Bank of England, Bank of Japan, and the central banks of Norway, Sweden, and Switzerland.
Last Friday, US stocks closed significantly lower. The S&P 500 dropped 1.22%, the Nasdaq declined 1.56%, and the Dow Jones Industrial Average fell 0.83%.
In terms of currency markets, the US dollar strengthened against the euro and the Japanese yen, with exchange rates of $1.0661 and 147.86 Japanese yen, respectively. The yields on 10-year and 2-year treasuries rose to 4.33% and 5.02%, respectively.
As we move forward, it will be crucial to monitor how the Federal Reserve navigates the uncertain economic landscape amidst rising inflation and market volatility. The decisions made by central banks worldwide will also play a vital role in shaping global monetary policies and investor sentiment.
