US Economy and Credit Markets Ended Sept. 18, 2020

The Federal Reserve's meeting from last week was noteworthy for the Committee's resolving that it "aim(s) to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time..." In accordance with this they maintained the currently accommodative stance with a target range for the federal funds rate at 0 to ΒΌ percent. The Committee observed that significantly lower oil prices and weak overall demand are keeping down consumer price inflation. They also saw overall financial conditions improving in recent months. August Industrial Production was reported increasing 0.4% last Monday which underwhelmed versus expectations but was the fourth consecutive month of expansion. August Retail Sales were seen increasing 0.6% last Tuesday and were up 2.6% versus a year ago. However, with the $600 weekly unemployment benefit from the federal government running out at the end of July, expectations going forward should be moderated. Wrapping up major reports from last week, it was noted that August Housing Starts declined but that the University of Michigan's preliminary report on U.S. consumer sentiment shot up to a six-month high with only 16% of respondents saying they expect a worse economy one year from now. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Tuesday: August Existing Home Sales (6.01m, 5.86m); Wednesday: September 18 MBA Mortgage Applications (N/A, -2.5%), September preliminary Markit US Manufacturing PMI (53.1, unch.); Thursday: September 19 Initial Jobless Claims (840k, 860k), August New Home Sales (890k, 901k); Friday: August preliminary Durable Goods Orders (1.1%, 11.4%).
Posted on Monday, September 21, 2020 @ 8:24 AM

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