US Economy and Credit Markets Ended April 30, 2021

The Federal Reserve met last Wednesday and left interest rates near zero and made no change to the pace of asset purchases. Of note, the Chairman commented that he did observe some "frothiness" in the equity markets but he largely attributed this to increased economic activity as a result of vaccinations. He also noted that it seemed unlikely, to him, that inflation should move persistently high while the labor market still has any significant slack. These comments and actions suggest that the Federal Reserve continues to intend holding rates unchanged for the foreseeable future and does not intend to slow asset purchases in the near term. On Thursday of last week Real GDP was recorded growing at a 6.4% annual rate in Q1. The GDP price index increased at a 4.1% annual rate for the first quarter, up 1.9% from a year ago. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Monday: April final Markit US Manufacturing PMI (60.7, 60.6), March Construction Spending MoM (1.8%, -0.8%) and April ISM Manufacturing (65.0, 54.7); Tuesday: March Trade Balance (-$74.5B, -$71.1B), March Factory Orders (1.4%, -0.8%) and March final Durable Goods Orders (N/A, 0.5%); Wednesday: April 30 MBA Mortgage Applications (N/A, -2.5%) and April ADP Employment Change (875K, 517K); Thursday: May 1 Initial Jobless Claims (540K, 553K); Friday: April Change in Nonfarm Payrolls (975K, 916K), April Unemployment Rate (5.7%, 6.0%) and March final Wholesale Inventories MoM (1.4%, 1.4%).
Posted on Monday, May 3, 2021 @ 8:47 AM

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.