US Economy and Credit Markets Ended August 20, 2021

Bob Carey
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US Economy and Credit Markets Ended August 20, 2021

Posted Under: Weekly Market Commentary

Longer dated Treasury yields fell last week as the August 18, the Federal Reserve Board and FOMC July 27-28 minutes were released. They discussed economic progress in light of COVID and noted that impacted sectors are improved but not yet fully recovered. They commented that "Inflation has risen, largely reflecting transitory factors." The Board feels that financial conditions remain accommodative and intends to continue pursuing accommodative policy until inflation moderately above 2 percent has been experienced such that inflation averaged 2 percent over time. It does insist that inflation "expectations remain well anchored at 2 percent." It was with such considerations that it left key rates unchanged. Regarding asset purchases the Committee discussed that it currently purchases $80 billion/month of Treasury securities and $40 billion/month of agency mortgage-backed securities. Since the December increase to the above rate, the Committee has observed that "the economy has made progress towards these goals (inflation and employment), and the Committee will continue to assess progress in coming meetings." Major economic reports (related consensus forecasts, prior data) for the upcoming week include Monday: August Preliminary Markit US Manufacturing PMI (62.5, 63.4) and July Existing Home Sales (5.83M, 5.86M); Tuesday: July New Home Sales (697K, 676K); Wednesday: August 20 MBA Mortgage Application (N/A, -3.9%), July preliminary Durable Goods Orders (-0.3%, 0.9%); Thursday: August 21 Initial Jobless Claims (350K, 348K) and 2Q GDP Annualized QoQ (6.6%, 6.5%); Friday: July preliminary Wholesale Inventories MoM (1.0%, 1.1%), July Personal Income (0.2%, 0.1%), July Personal Spending (0.4%, 1.0%) and August final University of Michigan Sentiment (70.5, 70.2).

Posted on Monday, August 23, 2021 @ 8:15 AM • Post Link	Share:
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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